Murdoch to Sell Part of Reuters Stock

A spokesman for Rupert Murdoch said Wednesday that the media mogul will sell part of his shares in Reuters Holdings PLC to raise money for his $3-billion acquisition of Triangle Publications Inc., publisher of TV Guide.

Reuters executives said a report that Murdoch would sell his minority holding in the British news agency took them by surprise.

“We don’t know anything about it,” Reuters spokesman Robert Crooke said.

Murdoch has said he plans to raise half the purchase price of Triangle, the Radnor, Pa.-based magazine publisher, by selling assets of News Corp., the Australian parent company of his worldwide newspaper, magazine and television empire. The remaining $1.5 billion will be financed with bank borrowing.

The Wall Street Journal reported Wednesday that Murdoch expects to get $200 million for 6.8% of Reuters, a publishing and information services company headquartered in London.

Howard Rubenstein, a spokesman for Murdoch, said the publisher intends to sell a 4% stake in Reuters. Rubenstein refused to elaborate.

Reuters shares are divided into two classes with unequal voting rights, and Murdoch would have to obtain the approval of other Reuters shareholders to sell the bulk of his holding.

Other Class A Holders

Murdoch, through News Corp., owns 9.5% of Reuters’ Class A shares, which have four votes apiece. The other Class A holders, the Press Assn. Ltd. of London, the Newspaper Publishers Assn. Ltd. (47.1% apiece), the Australian Associated Press (6.8%) and the New Zealand Press Assn. (0.9%), must either agree to buy Murdoch’s Class A shares or allow him to convert them to Class B shares.

News Corp. owns 3.2% of the Class B shares, worth one vote apiece and traded in the open market. Much of this holding, however, underpins an issue of News Corp. preference shares that would have to be redeemed for the underlying Reuters shares to be sold.

James Dougherty, an analyst with County Securities USA, said Murdoch was unlikely to have trouble finding a buyer for the Reuters shares he wants to sell but that the process will take time.

“There’s a lot more to it than calling up his broker and saying, ‘sell the shares,’ ” Dougherty said.

Dougherty said that while the other Class A holders could stymie Murdoch by refusing to buy his shares and denying him permission to convert them, the company bought back the last Class A shares that came up for sale.

He said Murdoch’s sale of his holding would not make much difference for Reuters.

“There’s been some doubt about long-term prospects for the growth of Reuters in the wake of the October crash, and they don’t need this on top of it,” Dougherty said. “But in the long pull it wouldn’t be any big deal. My interpretation is that this doesn’t reflect any doubts Murdoch has about the outlook for Reuters.”