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Murdock’s New Corp Split Board Approval

Courtesy of http://www.syracuse.com

Media Mogul Rupert Murdoch has received approval from the board of News Corp to split the $50 Billion media company into two separately traded companies.

The market immediately showed signs of approval and the News Corps company’s stock went up 10% since news broke out on Tuesday; up to $22.26 on Thursday midday.

The split will result in two separate companies; One company will be the print side operating newspapers including The Wall Street Journal, magazines and a book publishing.

The other company will be the entertainment company and will include 20th Century Fox Movie Studio, the Fox Broadcast TV Network and the Fox News Channel.

The board will need to approve formalities that will include management structure and details of the split. Somes items could take up a year to work out.

Over the years Murdoch avoided addressing large stockholder’s request to split off the publishing side which has suffered losses. This split move was a surprise to many.

Murdoch is planning to lead the entertainment company although he states the publishing company is very strong. But publishing is a weakening market though the Wall Street Journal and other papers in their hold are reputable and highly respected in their industries.

The largest speculations are about leadership in the publishing company and what if any roles will be for the Murdoch family member in either companies.

Estimates are that the publishing division would generate about $1.3 billion earnings (EBITDA ) $3.25 per share. And the Entertainment company to be valued at $52 billion, or $23 per share.

Murdoch has not commented on whether or not this split has come about because of the investigation surrounding the phone hacking/bribing officials allegations in the UK.

And if so will the split compies split help his case and appease the British telecommunication regulators