The company has filed an Information Memorandum and an Independent Expert’s Report related to the proposal with the Australian Stock Exchange (ASX). The Information Memorandum and Independent Expert’s Report will be mailed to shareholders within the next two weeks.
The scheme meetings will be held immediately after the company’s Annual General Meeting in Adelaide on Tuesday, October 26, 2004.
The Information Memorandum states that:
*The Special Committee of Non-Executive Directors established to evaluate the proposal has unanimously recommended the transaction to the Company Board;
*The Board concludes that the proposed transaction is in the best interests of shareholders and option holders and states that the directors of News Corporation unanimously recommend its approval by shareholders and option holders;
*The independent expert, Grant Samuel & Associates, concludes that the proposal is in the best interests of News Corporation’s shareholders as a whole as well as each class of shareholders and option holders.
Rupert Murdoch, News Corporation chairman and chief executive, says, “I and my fellow directors urge shareholders to carefully consider the detailed materials being sent to them and to vote in favour of this proposal.”
Murdoch says the proposal was designed to make News Corporation a more attractive investment to shareholders and that he believes the proposal has potential benefits for shareholders.
These benefits include:
*Enhanced US-based demand for the company’s shares, over time, resulting from an expanded active US shareholder base and the expected inclusion in major US indices;
*Potential narrowing of the trading discount of the non-voting shares relative to the voting shares, further enhancing the relative value of the non-voting shares;
*Improved access to a larger pool of capital available in the US, which should provide greater financial flexibility and improved pricing for capital raisings and acquisition purposes;
*Full consolidation and control of the QPL Publishing Business, a newspaper business with strong growth and profitability characteristics;
*Reduced corporate complexity; and
*External reporting in a manner consistent with News Corporation’s peer group in the US
The reincorporation proposal requires, among other things, the approval of News Corporation’s ordinary shareholders, preferred shareholders and option holders under schemes of arrangement and the approval of News Corporation’s shareholders of a capital reduction under Australian law.
Through the schemes of arrangement and the capital reduction, holders effectively exchange their shares in News Corporation for shares in News Corp US, a Delaware company.
Holders will be able to vote on the proposal either by proxy or in person at the scheme meetings.
If the proposal is approved, News Corporation will be reincorporated in the US and its primary listing will move from the ASX to the New York Stock Exchange (NYSE). The company will retain secondary listings on the ASX and on the London Stock Exchange (LSE).
The directors believe that the proposed transaction creates an opportunity for News’s shares to be included in the S&P500 and other major US stock indices in the future.
If the schemes of arrangement are approved by shareholders and option holders, News Corporation will apply to the Australian Federal Court for final approval. It is expected that, if all required approvals are obtained, the transaction will be completed in November 2004.
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