Murdoch confirms News Corp split

New York: Rupert Murdoch’s News Corp said on Thursday it plans to split into two companies, one holding its newspaper and publishing business and another its entertainment operations. [caption id=“attachment_360745” align=“alignleft” width=“380” caption=“Murdoch will serve as chairman of both companies and CEO of the media and entertainment company.”]  [/caption]   The publishing side is expected to be much smaller, with some analysts valuing it at about $5 billion, compared with the current market value for News Corp. as a whole of about $54 billion. “There is much work to be done, but our board and I believe that this new corporate structure we are pursuing would accelerate News Corporation’s businesses to grow to new heights, and enable each company and its divisions to recognize their full potential — and unlock even greater long-term shareholder value,” Murdoch said in a statement. Murdoch will serve as chairman of both companies and CEO of the media and entertainment company. The company said it plans to put together management teams and boards for both businesses over the next several months. The split remains subject to final board and regulatory approvals. News Corp. said it expects the process to be completed in about a year. Industry analysts say the faster growing pay-TV segment would be valued more highly by new investors not willing to buy shares in a company burdened by a newspaper industry in decline. Under the current proposal, shareholders will receive one share of common stock in the new company for each share of News Corp. they currently hold. Each company would maintain two classes of stock. A question remains about which entity would bear the financial risks of the ongoing UK phone hacking and bribery investigation. British authorities have been probing allegations that News Corp  journalists at its now-shuttered News of the World and other papers hacked into phones and bribed public officials to gain exclusive information. Besides legal costs, News Corp. also faces potential fines in the U.S. under the Foreign Corrupt Practices Act, which punishes companies that have bribed officials abroad. The splitting of News Corp. would be a symbolic turning point for its 81-year-old CEO. Murdoch’s media empire was built on the foundation of a single Australian newspaper he inherited from his father. News Corp  shares rose 19 cents to $22.60 in premarket trading. AP