Fox's Initial Public Offering: Unlocking Shareholder Value at News Corporation

News Corporation was planning to sell shares in its recently created subsidiary, Fox Entertainment Group (Fox). It was expecting to raise close to $2 billion making this initial public offering (IPO) the third-largest in U.S. history. In the previous few months, News Corp.'s stock price had tumbled, and the Dow Jones Industrial Average and the Standards & Poor 500 had both dropped significantly. The senior management team at News Corp. faced several crucial and complex decisions in the coming weeks concerning the Fox IPO. First, given the current market conditions, should the company proceed with the much-anticipated IPO, and if so, what was the optimal price and size of the offering? Moreover, was such a partial offering (i.e., equity carve-out) still the optimal solution to increasing shareholder value at News Corp.? This case describes global media and entertainment industry trends and allows for detailed analysis and discussion of conglomerate discounts and value enhancement strategies, including carve-outs; the IPO process, including timing considerations; and IPO valuation, with particular focus on comparable approaches.