Institutional investors have started offloading Twenty-First Century Fox shares after the company announced plans to remove its listing from the Australian Securities Exchange (ASX).
The dual-listed company’s Australian shares fell almost five per cent on Friday as shareholders prepare to vote on the delisting proposal at a special meeting in March or April.
The move comes six months after the $8 billion Rupert Murdoch-controlled company split from News Corp.
At the close of trade, Fox voting shares had slumped by $1.77, or 4.65 per cent, to $36.31 and non-voting stock was off $1.25, or 3.23 per cent, at $37.39, with nine million shares changing hands.
Analysts say institutional investors are unlikely to vote against the delisting as they look to dump the stock in the next few months.
Twenty-First Century Fox currently is dual-listed on the ASX and the Nasdaq in New York.
After the removal of the company’s listing from the ASX, all of the company’s Class A and Class B Common Stock will be listed solely on the Nasdaq market.
Twenty-First Century Fox chairman and chief executive Rupert Murdoch, who controls around 40 per cent of the voting stock, says the move will simplify the operating and capital structure of the company and provide improved liquidity for shareholders and greater efficiencies for the company.
The company anticipates the delisting will occur about a month after a favourable vote.
It says it will help shareholders who wish to continue holding the company’s stock to move their holdings to the Nasdaq after the delisting.
Kimber Capital head of research Chris Kimber said almost every fund in Australia would hold some Twenty-First Century Fox shares, but under their mandates many were unable to buy overseas stocks.
“Institutions are starting to sell,” Mr Kimber said.
“They will be forced to sell and reweight their portfolios elsewhere.”
Around 35 of the nation’s major fund managers were now trying to guess how hard and fast others would dump the stock which mainly owns overseas assets.
Still, Mr Kimber said, he was confident the company would retain its inherent value in coming months.
Smaller retail shareholders could transfer their holdings to the Nasdaq and benefit from the continued decline of the Australian dollar.
IG Market analyst Evan Lucas said the proposed delisting had caused a stir, with no talk of a share buyback as the company moved its shares to the other side of the world.
News Corp split in two last year, with the publishing arm – which also includes Australian pay TV assets – separating from the more profitable 21st Century Fox TV and movie operations.
In November, Twenty-First Century Fox said net income fell 44 per cent to $US1.255 billion for the three months to September 30, versus $US2.23 billion a year ago.
The company is due to release its second quarter financial results for fiscal 2014 next month.
