“I shouldn’t say this,” the News Corp CEO told Bloomberg Television. “I respect the analysts. But they dumped on me when I started Fox News. They dumped on me when I bought The Sun in London. I could go on. The analysts took our share prices down. I’m not too carried away about what they say. Although, I am happy to have them saying nice things at the moment.” Indeed, most are applauding his new plan to divide News Corp into two companies: one for entertainment and the other for publishing. A few increased their price targets for the stock — which was trading midday at $22, down 1.4% on the day but up more than 9% since before the news broke this week. Barclays Capital’s Anthony DiClemente went to $25 (+$2) while Miller Tabak’s David Joyce moved to $26 (+$1). Nomura Securities’ Michael Nathanson says that the new announcement, along with News Corp’s stock repurchases and recent growth, make it “one of the most attractive media stocks in our coverage universe.” Still, some are concerned about the scant information about the planned publishing company. “We do not know if Publishing will be a yield providing business or if there will be a special dividend,” says Wells Fargo’s Marci Ryvicker. Since it will include Australia’s Foxtel television operation as well as some of the country’s sports networks “this may be the one area that is not viewed as ‘clean’ by investors.” Barclays predicts that the Publishing company will have little debt and as much as $3B in cash to resolve hacking-related charges, acquire properties, and pay for newspapers’ digital plans. Joyce says that if the Publishing unit is largely debt-free then it “could go private…with the Murdoch family, currently with a 39.7% vote (but 13.5% of the equity), in full control.”
Analysts Like News Corp Plan, But They “Dumped On Me” Rupert Murdoch Says
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