Logo

Fox Entertainment Shares Advance on Murdoch Comments

Oct 6, 2004  •  Post A Comment

Shares in Fox Entertainment Group continued their march upward Wednesday as Wall Street continued to react to word that controlling shareholder News Corp. is considering buying the remaining shares in FEG that it doesn’t already own.

Since midday Monday, FEG shares have advanced more than 4 percent during heavier-than-average trading of the stock. News Corp. controls 80.6 percent of FEG stock, and in the past has used the company as a way to access the U.S. capital markets.

News Corp., despite having 75 percent of its profits emanating from the U.S., is based in Australia, though the company is in the process of reincorporating in the United States

The stock-price lift accelerated after News Corp. Chairman Rupert Murdoch said at an investor conference Tuesday that the company was “looking at” consolidating Fox into the News Corp. fold after the reincorporation. Such a move has been advocated for years by Wall Street observers, and speculation that the company would follow through picked up speed after News Corp. announced plans to become a U.S.-based company.

It is unlikely that News Corp. would buy out the rest of DirecTV Group, the satellite operator in which News Corp. owns a controlling 34 percent stake. As part of the agreement reached last year with former DirecTV owner General Motors, News Corp. is contractually bound not to try to buy a larger stake in the satellite company because of severe tax penalty that would be levied against GM.