The long running dispute over who will control the Murdoch family media empire has been resolved in a legal settlement valued at US$3.3 billion (A$5 billion).
Under the deal announced by broadcaster Fox Corporation, eldest son Lachlan Murdoch will cement control of the group, which also includes News Corporation, the company founded by his 94-year-old father Rupert.
In a statement, Fox said new trusts would be created for Rupert’s children James Murdoch, Elisabeth Murdoch and Prudence MacLeod, who will receive cash funded partly from the family trust’s sale of Fox and News Corp shares valued at $1.655 billion.
The size of the cash component was not specified, but the Australian Financial Review newspaper cited a The New York Times report valuing the deal at $3.3 billion.
In return, the three ‘departing beneficiaries’ will sell their personal holdings in Fox and News over of six months, agree not to buy more shares in the two companies, and cease to be beneficiaries of any trust holding shares in the companies.
A new trust will be established for Lachlan Murdoch and Rupert’s other ‘remaining beneficiary’ children Grace and Chloe Murdoch, which will own the remaining shares held by the family trust, consisting of 36.2% of Fox Class B stock, less than 0.1% of Fox Class A stock, 33.1% of News Class B stock and less than 0.1% of News Class A stock.
Lachlan Murdoch will control the new trust and these shareholdings through to 2050.
The dispute arose from an attempt by Rupert and Lachlan to change the terms of the family trust that gave Lachlan, Prudence, Elisabeth and James equal voting rights when the founder died.
“Fox’s board of directors welcomes these developments and believes that the leadership, vision and management by the company’s CEO and Executive Chair, Lachlan Murdoch, will continue to be important to guiding the company’s strategy and success,” Fox said.
Rupert Murdoch will remain Chairman Emeritus of Fox Corporation, which owns Fox News.
Fox Corp B shares closed 84 cents (1.5%) higher at US$56.81 on Monday (Tuesday AEST), valuing the company at US$26.51 billion, while News Corp (ASX: NWS) ended 11 cents (0.22%) lower at A$50.97 on Monday, valuing it at A$17.67 billion.
News Corp owns newspapers including The Wall Street Journal, The Times, and The Australian and a majority stake in property platform REA Group (ASX: REA).
