Shortly after, one of News Corp’s largest shareholders, T. Rowe Price, said in an interview with The New York Times that the proposed merger would probably undervalue News Corp, which it believed was trading for less than the company was worth.
Further complicating matters was the divergent performance of each company’s stock price — News Corp jumping about 26 percent while Fox inched up about 3 percent — since Mr. Murdoch’s proposal became public. His initial plan would have divided ownership among stockholders based on the market value of each company, but it did not specify how it would be divided.
The proposal raised questions about what it would mean for succession at the companies, with many believing a merger would give Lachlan, his father’s chosen heir, expanded power. Mr. Murdoch’s other son, James, wrote letters to the News Corp and Fox boards raising questions about the deal. It is unclear what those objections were.
A spokesman for Rupert Murdoch did not have additional comment.
The Murdoch Family Trust, which Rupert Murdoch controls with his eldest children, commands roughly 40 percent of the vote at both Fox and News Corp through its Class B shares. Any deal would have required the approval of a majority of investors who are not part of the Murdoch trust.
The two special committees for News Corp and Fox Corp have been dissolved, News Corp said in its statement. Both committees had made progress toward a merger in recent weeks when an outside firm offered to acquire a major part of News Corp, according to two people with knowledge of the move.
The CoStar Group, a provider of data and marketing services to the commercial real estate industry, recently informed News Corp that it was interested in acquiring the company’s stake in the digital real estate business Move at a valuation of more than $3 billion, the people said. After the talks with CoStar got serious, News Corp and Fox decided to put the merger talks on pause to await the outcome of negotiations with CoStar.
A spokesman for CoStar did not respond to a request for comment.
Fox is facing further challenges beyond its halted merger attempt. Fox Corporation and Fox News are being sued for $1.6 billion by Dominion Voting Systems in a defamation case over the network’s promotion of falsehoods and conspiracy theories about voter fraud in the 2020 election. Mr. Murdoch was deposed by Dominion lawyers last week, and the judge in the case has set a trial date for April.