Fox to delist from ASX
Recommendation
21st Century Fox has announced plans to delist from the ASX, remaining only on the Nasdaq exchange in the US, as part of its “ongoing agenda to simplify the operating and capital structure of [the] company”, in the words of Chairman Rupert Murdoch.
The proposal will need to be approved by a shareholder meeting, expected in March/April, but that’s a given due to Murdoch’s 39% voting stake and the large North American ownership. The delisting is expected to follow in April/May. There will be a facility through which holders of the ASX-listed shares (‘CDIs’) can convert them into the Nasdaq-listed stock.
So shareholders are faced with selling or retaining a US-listed stock. With the voting stock not far shy of the middle of our $30–$45 Hold range*, there are arguments for both. But bear in mind that if you continue to Hold, you will have to deal with the additional administration involved in holding an overseas stock and we’ll be officially ceasing coverage of the stock following the delisting. Those that already own overseas stocks and are happy to rely on their own research for them are more likely to be comfortable holding. Our 2012 special report Ripe for the picking: Overseas stocks to buy now contains a ‘survival guide’ to overseas investing.
The stock is down 2% since 21st Century Fox first-quarter result on 6 Nov 13 (Hold – $35.63), but up about 115% since our original recommendation on 25 Oct 10 (Long Term Buy – $16.30). For the moment, our recommendation remains HOLD, but it’s time to consider your options at the very least.
*Our Hold range for the non-voting stock is $29–$44.
Note: Our model Growth Portfolio owns shares in 21st Century Fox.