News Corp. considering splitting in two

LOS ANGELES – Rupert Murdoch’s News Corp. is preparing to spin off its newspaper business into a separate company, an acknowledgement that the printed page that gave rise to a media empire will never again be central to its future.

The 81-year-old billionaire built the company from a single Australian newspaper he inherited from his father. And through the years, he maintained a fondness for newspapers even as he purchased entertainment companies and assembled a global conglomerate with a market value of $52 billion.

The Wall Street Journal, News Corp.’s flagship newspaper, reported early Tuesday that News Corp.’s board of directors will consider the plan today and possibly announce its approval Thursday morning.

Under the proposal, newspapers will be shunted off into a separate publicly traded entity, which Murdoch will control along with a second company that comprises News Corp.’s entertainment business. That portion of the company includes Fox News Channel, its broadcast TV network and the 20th Century Fox movie studio.

Investors hailed Tuesday’s announcement that News Corp. is considering a split, sending the stock up $1.68, or 8.3 percent, to close at $21.76 Tuesday. During the day, the stock was as high as $21.89, its highest level since hitting $21.90 on Oct. 25, 2007.

Analysts said the newspaper and book publishing division could be worth about $5 billion – what Murdoch paid the Bancroft family for Dow Jones & Co., the publisher of the Wall Street Journal, in 2007.

News Corp. investors have never liked that acquisition and over the last five years the stock price has stagnated, hurt by fears Murdoch would overpay for other newspaper assets.