LONDON/NEW YORK (Reuters) - Rupert Murdoch paved the way for his daughter Elisabeth (Liz) to rejoin News Corp as a senior executive on Monday by buying her television production company Shine in a 415 million pounds ($673 million) deal.
The deal raises new questions over who will succeed Rupert Murdoch as chief executive at News Corp’s media empire where Liz’s younger brother James, has until now widely been viewed as heir apparent to his soon-to-be 80 year old father.
Rupert Murdoch, whose News Corp owns broadcaster Fox and publishes newspapers including the Wall Street Journal and the UK’s News of the World, said he expected Liz Murdoch to join the board of News Corp on completion of the deal. If she returns to the board she will be the third Murdoch sibling alongside James and her other brother Lachlan, who is a non-executive director.
Liz Murdoch will report to Chase Carey, deputy chairman of News Corp, sidestepping her brother James, who is responsible for News Corp’s European and Asian assets even though Shine is primarily a London-based company with operations in Europe.
Liz Murdoch founded UK-based Shine, which makes shows such as Masterchef and The Tudors, in 2001. She owns 53 percent of the company so will likely pocket around 200 million pounds on the sale. Other shareholders include UK satellite TV operator BSKyB and Sony Corp.
Liz Murdoch set up Shine after leaving News Corp in 2000 following disagreements with management.
Insiders have long said that Murdoch would prefer to have one of his children eventually take over and run the $50 billion media conglomerate.
Claire Enders of Enders Analysis said the move would increase competition in the succession race but it did not herald Murdoch senior stepping down.
“The importance of putting his daughter on the board is that he obviously would like to have the option of one of his children taking over as chief executive, and they will no doubt perform a whole lot better breathing down each others’ necks,” she said. “But I don’t think that’s a precursor to him stepping down.”
Rupert Murdoch has been involved in News Corp’s bid to take full control of BSkyB, a politically charged transaction against a backdrop of a phone-hacking scandal at his News of the World newspaper.
News Corp and Shine signed a non-binding letter of intent and will now proceed with the regulatory filings required for the deal, they said in a joint statement.
They will continue to negotiate the final terms of the deal, which is pending approval from both boards, the audit committee and the receipt of an independent fairness opinion.
The companies did not provide an expected date for the deal to close.
Reporting by Paul Sandle in London, Yinka Adegoke in New York; Additional reporting by Esha Dey in Bangalore; Editing by Roshni Menon; Editing by Andrew Hay