SYDNEY, Oct 24 (AFP) - Shareholders in News Corp. vote this week for a move to the US in a defining moment for the global media empire created by Rupert Murdoch from a small newspaper business in the sleepy Australian city of Adelaide, analysts said.
Market watchers said last-minute concessions by News Corp. on maintaining shareholders' rights had won over the crucial institutional investors who will decide the outcome of the vote at the company's annual general meeting Tuesday.
Shaw Stockbroking research director Scott Marshall said many Australian investors would be sorry to see the country's largest listed stock depart but it was impractical for a top-five global media company to stay based in Adelaide.
"I would think Murdoch will win the vote and win it quite easily," Marshall told AFP.
"It's a logical move, it's a move that should occur and it's inevitable that Australian shareholders will simply have to accept that News Corp. is no longer an Australian company," Marshall said.
Under the relocation plan, unveiled by Murdoch in April, News Corp. will re-incorporate in the US state of Delaware and shift its prime listing to the New York-based SP 500 index.
Murdoch said the move would boost News Corp's growth by giving it greater access to rich US capital markets and lift its share price by removing the restrictions on US institutions investing in an Australian-based company.
"Up until now it's been an Australian company and most big American institutions are not allowed to invest outside of America -- that's the mandate," EL and C Bailleau analyst Ivor Ries said.
Australia's Business Review Weekly said re-incorporation under Delaware laws would also help Murdoch, 73, cement succession plans for the company he inherited from his father Keith in 1952.
Murdoch's sons Lachlan, currently in charge of News Corp's Australian newspapers, or James, head of British satellite operation BSkyB, are favourites to take over their father's mantle.
The US move represents a final break from his Australian roots for Murdoch, who has shown no room for sentimentality in becoming a global media mogul, although he maintains News Corp. will maintain its antipodean culture.
Once dubbed "the Dirty Digger" for his use of topless page three models in British tabloids, Murdoch swapped his Australian passport for US citizenship in 1985 to bypass laws threatening his dream of creating a fourth US television network, Fox.
News Corp. already generates more than 80 percent of its revenues in the United States and is effectively run from New York, despite what the company letterhead says.
It owns some of the world's most recognisable media brands, including the Fox movie and television empire, publisher HarperCollins, British newspapers The Times and The Sun and US tabloid The New York Post.
Yet Murdoch's US plan was under threat earlier this month when institutional investors threatened a revolt over News Corp.'s refusal to include shareholders' rights provisions it currently observes under Australian law in its new Delaware incarnation.
Murdoch backed down, rather than jeopardise a plan he says is vital to News Corp.'s future growth.
Marshall said Murdoch was looking at the big picture, which made relatively minor concessions on how shareholders are treated unimportant in comparison to a vital step in his company's corporate evolution.
"Clearly from an operational and commercial point of view it's a positive move, although it's very difficult to quantify," he said.
"It's going to make funding growth much easier by opening up US capital markets to News Corp., it's also going to profitably align the US shareholders with the US operations.
"There won't be the limit to growth that an Australian-incorporated company operating most of its business in the US encounters."
Murdoch's proposal requires the approval of 50 percent of shareholders and 75 percent of shares voted to pass, in what will possibly be the company's final annual general meeting in Adelaide.
If the proposal is given the go-ahead by investors, News Corp. expects to list on the New York Stock Exchange on November 12, with its Australian listing phased out over time.
10/24/2004 04:57 GMT - AFP