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The Murdochs are the media’s ruling monarchs and today is a Hello! moment like you seldom get in business journalism. James Murdoch is giving up being chief executive of BSkyB to succeed his father as non-executive chairman, as we reported this morning. He will also take control of News Corp’s European and Asian operations.
For a story that seemed inevitable, this is oddly fascinating. Maybe journalists just like media stories because they are about them, but I think there is more to it. Rupert Murdoch is clearly one of the most phenomenal entrepreneurs of the last 50 years and, at BSkyB, his son has proved himself to be extremely able. You can watch and read my View from the Top interview with him from six weeks ago in which I asked him whether he wanted to be more involved with News Corp.
This morning’s other great story, on FT Alphaville, was that Xstrata might be willing to sell itself, having previously been regarded purely as a buyer. Paul Murphy was hearing rumours that CVRD of Brazil was interested and Xstrata shares rose 8½ per cent on the excitement. CVRD’s chief executive, Roger Agnelli, tried to calm things down by telling journalists at a lunch today that “if we bought everyone that we were rumored to buy, we would have acquired the entire world by now”, plus the usual stuff about being disciplined. That, though, is a long way short of a denial.
Luqman Arnold has at last lodged his plan for Northern Rock. It includes plans to raise £800m through a transferable rights issue and a £150m equity subscription by Olivant. JC Flowers, we wrote this morning, has withdrawn from the process but frankly I’m not sure how seriously to take that.
I see Arnold has taken our advice and proposed giving the Bank of England an equity stake in Northern Rock – its first in a UK bank for nearly 14 years, according to efinancialnews (National Mortgage Bank was the last, apparently). Olivant would issue the Bank with warrants equivalent to 5 per cent of the enlarged share capital and giving taxpayers a share of the upside he hopes to create. Arnold, by the way, would be “seconded to the company’s board and appointed executive chairman of Northern Rock with immediate effect until full repayment of the Bank of England facility”.