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News Corp. moving home to U.S.

By CNN's Geoff Hiscock

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Murdoch, shown with elder son Lachlan, at the company's annual meeting in Adelaide.

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SYDNEY, Australia (CNN) -- Global media group News Corp. will move its primary stock market listing from Australia to the United States, the company said Tuesday.

News Corp., which is controlled by executive chairman Rupert Murdoch, said the move would increase demand for the company's shares and lower its cost of capital.

Murdoch told media and analysts on a conference call the logic of the move was compelling.

News Corp. said that subject to shareholder and regulatory approvals, the change would take place by the end of this year.

News Corp. is the biggest company on the Australian Stock Exchange, with a market capitalization of Aust. $65 billion (about $49 billion).

Although News Corp. generates more than three-quarters of its revenue and profits in the United States, its primary incorporation is in Australia and it has traditionally held its annual meetings in the Australian city of Adelaide.

That reflects the symbolic status of the city where Murdoch 50 years ago began his climb to global media tycoon via a small daily newspaper, the Adelaide News.

Today, News Corp.'s interests include a string of newspapers in Australia, the UK and the United States, satellite broadcaster DirecTV in the U.S., other satellite broadcasters in Europe, Asia, Australia and Latin America, the Fox Broadcasting Network, the Hollywood studio 20th Century Fox and book publisher HarperCollins.

The Murdoch family has the biggest voting interest in News Corp., followed by U.S. cable entrepreneur John Malone's Liberty Media Corp.

News Corp. said Tuesday that as part of the reorganization, the company would buy from Murdoch interests the 58 percent stake in Australian publisher Queensland Press Ltd (QPL) not held by News.

QPL owns a 15.2 percent voting interest in News Corp.

It said the Murdoch family interests would not vote on any of the proposed transactions and the Murdoch voting interest would not increase if shareholders approved the proposal.

News Corp. said there was no change in its commitment to Australia and it would retain its ASX listing.

But it said that changing the home country of incorporation to the United States would give it better access to capital markets and make its shares eligible for inclusion in a variety of U.S.-based indices.

"The company believes the increased demand for News Corp. stock following a U.S. reincorporation may narrow the historic trading discount of the non-voting shares relative to the voting shares, thereby reducing the company's cost of capital," it said in a statement issued to the Australian Stock Exchange late Tuesday.

It said that if the proposals are approved, the voting power of the Murdoch interests will be slightly lower than now, while the Murdoch economic interest will be slightly higher.

According to comments by Murdoch in Sydney late Tuesday, his voting stake will move from 28.9 percent to about 28.4 percent.

News Corp. shares closed 1c higher at A$12.16 in Australia Tuesday. They are up 1.42 percent so far this year, compared with a 4.7 percent gain for the broad S&P/ASX200 index.


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