News down on share index worry
SYDNEY, Australia (CNN) -- Shares in media giant News Corp. are down sharply in Thursday trade after Standard & Poor's said the company could not simultaneously appear in both the main U.S. and Australian stock indices.
News, controlled by Rupert Murdoch, plans to move its primary listing to the United States to improve its access to capital markets and to win new shareholders.
The move will be put to a vote later this year and requires approval from 75 percent of shareholders. Murdoch, whose family has about 30 percent of the voting stock, has already said he will not vote on the issue.
The Australian Stock Exchange had hoped to retain News, which is the single largest component of the benchmark S&P/ASX200 index.
Standard & Poor's said Wednesday a company could not simultaneously be a member of the S&P500 in the United States and the S&P/ASX50 (a subset of the S&P/ASX200) in Australia.
It said it was making the announcement ahead of any vote to "bring clarity to the marketplace".
If News moves from Australia, domestic fund managers will likely shift money out of the stock, and trading volumes on the ASX will fall.
News shares are down 2.3 percent to A$12.86 in Thursday trade.
"News Corporation believes that a large majority of shareholders recognize the clear and compelling benefits of the plan to reincorporate to the United States and will support the proposal when a vote is taken later this year," News said in a statement late Wednesday.