News Corp in shock switch to US

RUPERT Murdoch shocked the media industry today by announcing that his newspaper, film and television empire is to uproot from its Australian homeland and become a US corporation.

He said: 'The move should substantially enlarge our shareholder base, enhance liquidity and increase our ability to raise new funds.

'Our operational headquarters have been in New York for many years and three-quarters of our revenues and profits are from the United States.'

Murdoch said, however, that the company was not quitting the country of his birth and remained just as committed to the newspapers and other media interests there. 'This will not result in the loss of a single Australian job. We are deeply proud of our Australian heritage,' he said.

Murdoch, 73, took American citizenship more than a decade ago in order to be able to buy Fox Television. He has lived in the States for many years. Some commentators believe the shift to the US would enable him to pay himself even more. Last year he collected just over $12m (£6.6m) in pay and bonuses.

News Corp said the shift of its main listing from the Australian Stock Exchange to the New York Stock Exchange will allow a large number of US institutions that are barred from investing in foreign companies to back the group.

It also claimed that the move should reduce the discount between the voting and non-voting shares in the company.

Murdoch stressed that the reincorporation in the US would have no effect whatsoever on News Corp's trading strategy and long-term plans.

Nor should it change the Murdoch family holdings, which amount to 30% of the equity despite a shuffle of assets that will see News Corp take out the 58% of Queensland Press directly owned by the family and worth about A$2.5bn (£1bn).

This deal will be valued by an independent committee and the Murdoch family will be bought out in new News Corp shares.

Murdoch will not vote on any of the proposals involving the shift of domicile. The move will need approval from 75% of the rest of the group's shareholders and should be completed by the end of this year.

The company will keep secondary share listings in Australia and London.

About 65% of the turnover in News Corp shares is currently handled by the Australian Stock Exchange and the company is one of the largest and most heavily traded on that market. Murdoch said he hoped the group would still be a constituent in the major Australian share indices.

News Corp has a capitalisation of A$68bn (£28.3bn) out of a complete market value of A$993bn.