It’s been an interesting time for Twenty-First Century Fox Inc (ASX: FOX) over the past year, as its demerger from News Limited was completed and its intentions to delist from the ASX were floated in front of shareholders. The delisting is intended to simplify the operating structure, as well as save on costs associated with maintaining dual listings and so on.
Fox shareholders have now approved the delisting, and Fox received approval for an unconditional delisting (merely a formality) from the Australian Securities Exchange last month. Fox shares will stop public trading from 1 May and the company will be delisted on 8 May. A voluntary share sale will continue until 9 July, allowing shareholders to sell their holdings, and from 16 July, all remaining shareholders will have their shares converted into NASDAQ Twenty-First Century Fox Inc common shares (NASDAQ: FOX: FOXA).
It is hopefully just the beginning in Fox’s transformation, with online content and consumer piracy increasingly competing with Fox’s paid subscriptions. Shareholders seem supportive of the news with very little volatility seen in the lead-up to delisting, and Fox is trading broadly in line with its NASDAQ valuation (factoring in currency differences).
Fox has been one of the more successful companies with regards to adapting to multi-platform viewing and growth in online content demand, but like its contemporary Seven West Media Ltd (ASX: SWM), labours under heavy debt.
Fellow TV companies Ten Network Holdings Limited (ASX: TEN) and Nine Entertainment Co Holdings Ltd (ASX: NEC) have joined Fox and Seven in developing online content offerings as the internet increasingly competes with the entertainment box in the lounge room. Seven and Ten have both had their problems with the transition, although the former has managed anaemic revenue growth while the latter has watched its earnings and ratings struggle considerably.
It remains to be seen whether there is a place for ‘conventional’ television in the brave new world, or if we will all end up watching content streamed from the internet rather than outer space. The TV has the advantage of being a more social device compared to a tablet or computer, although new smart TVs with WiFi offer the convenience of internet programming without the expense of a Foxtel installation. Fox and Seven are moving in the right direction with their online offerings, though I personally feel that the victory of premium TV services over free internet content in Australia will be enormously hard-won, if it is winnable at all.