News Corp. spins off $2.6 billion newspaper and publishing arm
The newspaper and publishing unit being spun off by media giant News Corp. will begin operations with $2.6 billion in cash, according to regulatory documents filed Friday.
The company to be created by a split of magnate Rupert Murdoch’s conglomerate will get a cash infusion when the breakup takes place, the documents showed.
No date was given for the split, but executives have said they hope it will occur before the end of the company fiscal year in June.
The publishing arm, which includes the Wall Street Journal, newspapers in Britain and Australia and education operations, is tentatively being called the New Newscorp in regulatory documents.
“New News Corporation’s principal source of liquidity is internally generated funds and cash and cash equivalents on hand,” the document filed with the Securities and Exchange Commission said.
As part of the separation, the parent company “is expected to make a cash contribution to New News Corporation such that… it expects to have approximately $2.6 billion of cash on hand.”
The cash and credit for the new group could be used for acquisitions in the sector, the statement said.
“New News Corporation has evaluated, and expects to continue to evaluate, possible acquisitions and dispositions of certain businesses,” it said.
The film and television operations will be part of a larger unit to be known as Fox Group, including the Fox studios and television properties.
“The new News Corporation’s strong balance sheet will provide the company with full financial flexibility to pursue its strategic agenda, which is to further develop and expand the power of its market-leading brands over a myriad of platforms,” Murdoch said in a statement.
“We believe the new News Corporation’s strong balance sheet, along with its diversified revenue base, will be key competitive assets that will allow the company to lead in innovation and the creation of long term shareholder value.”
The company had announced the restructuring in June, a move partly seen as a nod to shareholders angered by the reputational damage and costs inflicted by a phone hacking scandal in Britain, and partly because of troubles within the group’s publishing arm.