Date set for News Corp. move vote
SYDNEY, Australia (CNN) -- Global media group News Corporation will ask its shareholders to approve its move of domicile from Australia to the United States at a meeting in Adelaide on October 26.
News Corp. Executive Chairman Rupert Murdoch said the proposed move was designed to make the company a more attractive investment to shareholders.
Murdoch urged shareholders to vote in favor of the proposal, which would see the group move its main place of incorporation from the city of Adelaide in South Australia to the U.S. state of Delaware.
When Murdoch announced in April this year that the company would shift its primary stock market listing to the United States, he said the change would increase demand for its shares and lower its cost of capital.
In a statement to the Australian Stock Exchange (ASX) Wednesday, News said it had received approval from the Australian Federal Court to convene the shareholder meeting, to be held immediately after the annual general meeting on October 26.
It also said an information memorandum would go out to shareholders within the next two weeks. It said this included a report by an independent expert, Grant Samuel & Associates, which concluded the proposal was in the best interests of shareholders.
The announcement pushed News shares 4 percent higher on the ASX to close Wednesday at A$11.98. The media giant is the biggest company on the ASX, with a market capitalization of about Aust. $64 billion ($44 billion).
Its move will have a major impact on the way the benchmark S&P/ASX200 index is compiled, as Standard and Poor's has already said it will include News in the main U.S. index, the S&P500, and withdraw it over a nine-month period from the ASX200.
News, which now gets more than three-quarters of its revenue and profits from the United States, has traditionally held its annual meetings in 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, Adelaide News.
But that symbolism has carried a cost of capital that News increasingly has found hard to justify.
Today, News' 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.
Murdoch, who was born in Australia but is now a U.S. citizen, holds a voting stake of about 28.9 percent. That will reduce to 28.4 percent if the deal is approved. The Murdoch family's economic interest will be slightly higher.
If the go-ahead is given on October 26, News said it expected to complete the transaction in November.