Investors unmoved by Murdoch, McLennan moves
The appointment of Lachlan Murdoch as non-executive chairman of News Corp and 21st Century Fox and Hamish McLennan’s elevation at Network Ten don’t seem to have impressed investors or some stock analysts.
News’ share price fell by 2.2% to $17.88 while Ten declined by 0.75% to 26.7 cents on the Australian Stock Exchange this morning.
Analysts said investors had long expected the succession plan announced by Rupert Murdoch, which also sees James Murdoch taking the role of co-chief operating officer of Fox.
Lachlan resigned as non-executive chairman of Ten Network Holdings but is keeping his 8.8% stake. Some analysts have questioned the Ten board’s decision to elevate McLennan from CEO to executive chairman, noting it is unusual to combine the roles of CEO and chairman.
BBY analyst Mark McDonnell told IF he did not see either announcement as “something that will ignite the share price of either company.“
McDonnell, who has under-perform ratings on News and Ten, said, “It’s about whether the incremental investor is going to be seeing this as a reason to now buy into either company, having previously not done so.”
As for Ten, he said, “Hamish has been running the show. There is no indication they are looking for a new CEO, so it’s more of the same really for Hamish.”
Another analyst queried whether McLennan occupying dual roles at Ten would raise corporate governance issues.
Another stock-watcher said he expects Lachlan to sell his stake in Ten, possibly as a prelude to News buying the struggling broadcaster. That analyst is less concerned about McLennan’s promotion, observing, “He put his own money into Ten and he’s having a red-hot go. I think he is the heir apparent to run News Corp in Australia; he worked for Rupert for three years.”
Seven West Media CEO Tim Worner welcomed Lachlan’s appointment, stating, “It is truly great to see an Australian going onto lead a global media company like this. He has already proven himself to be an executive with foresight and acumen in the Australian media marketplace and we have no doubt that he will make a great contribution to a great company. Good on him.”
Rupert Murdoch said he’s thrilled Lachlan is “returning to a leadership role at the company,” declaring, “This appointment is a sign of confidence in the growth of News Corp and a recognition of Lachlan’s entrepreneurial leadership and passion for news, digital media and sport.”
At Fox James Murdoch will have responsibility for the Fox Network and the Sky and Star pay-TV businesses in Europe and Asia.