- The Washington Times - Tuesday, April 6, 2004

SYDNEY, Australia (AP) — Rupert Murdoch’s media conglomerate, News Corp., plans to shift its incorporation to the United States from Australia, in a move the company hopes will stimulate demand for its shares.

The company is effectively already run from the United States, where Mr. Murdoch and other senior executives are based. Mr. Murdoch gave up his Australian citizenship in 1985 to become a U.S. citizen.

News Corp. owns the Fox television network, Fox News Channel, the New York Post newspaper and the Twentieth Century Fox studio in the United States.

DirecTV, the nation’s largest direct broadcast satellite provider, is also part of the group. News Corp. purchased a 34 percent stake in the company last year, a deal federal regulators approved only after News Corp. assured them that competitors would still have access to its programming.

The company will move its primary stock listing to the New York Stock Exchange from the Australian exchange by the year’s end.

The move reflects the company’s strong presence in the United States, where it draws more than 75 percent of its revenue and profits. The move also could make it eligible for inclusion in major stock indexes such as the Standard & Poor’s 500.

The company’s key U.S. entertainment assets, including the movie studio, TV stations and cable networks, are held by its U.S.-listed subsidiary, Fox Entertainment Group.

A primary listing in the United States is expected to significantly increase its shareholder base, the company said in a statement yesterday.

“While historic gains in News Corp. stock have been impressive, our present status as a foreign issuer in the U.S. leaves many of the world’s biggest funds and investors unable to invest in News Corp.,” Mr. Murdoch told reporters in a conference call.

“That, we believe, is a prime reason our stock trades at a discount to some of our peers, despite our very strong financial performance in the past few years,” Mr. Murdoch said.

Mr. Murdoch was a key figure in the broadcast industry’s drive last year to persuade the Federal Communications Commission to loosen the government’s media-ownership rules.

The FCC, in a party-line, 3-2 vote, adopted rules that allow a single company to own TV stations that reach 45 percent of the nation’s viewers. Congress last year voted to roll it back to 35 percent, but in the end, lawmakers set the cap at 39 percent after the White House threatened to veto a giant spending bill in which the measure was included.

Despite its many U.S. media holdings, the company has retained its links with its Australian heritage, continuing to hold annual general meetings in the South Australian capital of Adelaide, where it has its registered office. The annual general meeting there later this year will be its last in Australia.

“I’ll miss the Adelaide [annual meetings] I guess, but we’re still going to have them there in the form of a big annual information meeting, which I certainly intend to chair,” Mr. Murdoch said.

A formal shift of its incorporation to the United States will mark the end of an era for News Corp. that began more than 50 years ago when Mr. Murdoch inherited a small South Australian newspaper business from his father, Keith Murdoch.

Under the proposed changes, existing holders of ordinary and preferred shares and holders of ordinary and preferred American depositary shares will exchange their equity for equivalent stock in a new News Corp., a Delaware corporation that will become the new parent entity.

The proposed changes are subject to shareholder approval, and Murdoch family interests won’t vote with other shareholders on any of the transactions, the company said.

The change is likely to have little effect on operations.

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