Oz fears grow over News Corp's move

RUPERT Murdoch's News Corp today outlined the details of its plan to move headquarters from Australia to Delaware in the United States, with the full board unanimously approving the relocation.

But the announcement has sparked fears of the catastrophic impact it may have on Australian News Corp investors and the Stock Exchange in general.

Under the plan, existing News Corp shareholders will get shares in a US entity, News Corp US, which will have its primary listing on the New York Stock Exchange and secondary listings on the Australian Stock Exchange and London Stock Exchange.

The company will change its name to News Corporation.

News Corp will also acquire from the Murdoch Interests - which includes the family and some charities - the 58% controlling holding in Australia's Queensland Press not already owned by News Corporation through the acquisition of the Cruden Group of companies.

News Corporation shareholders and option holders will receive shares and options in News Corp US at a ratio of one-for-two.

Murdoch Interests has agreed to a valuation of A$2.45bn (£960m), after deducting A$500m of debt, for the QPL publishing business.

After the deals are completed, Murdoch Interests will own 29.48% of the voting shares of News Corp US, slightly less than the 29.87% of the voting shares of News Corporation that Murdoch Interests currently controls. The announcement of the planned move in April passed with barely a ripple in Australia, with fund managers and the government accepting the move as inevitable.

However, there are growing fears that the move will damage the investment market in Australia, after ratings agency Standard & Poor's decision to remove News Corp from Australian stock market indices.

One of the country's leading fund managers has reacted angrily to that decision.

In a letter to newspaper editors, AMP Capital Investors chief investment officer Merv Peacock said he was disappointed the credit rating agency had not listened to all parties before making its decision.

'This decision will have a major impact, not just on large fund managers but on many Australians through their superannuation investments,' said Peacock.

The fund holds about 2% of News's ordinary stock and 1% of the non-voting stock.