SCHEDULE: Murdoch Entities Consolidate Fox Corp Class B Shares

LGC Holdco, controlled by Lachlan K. Murdoch, acquired a significant stake in Fox Corporation's Class B Common Stock through a private purchase and a $1 billion collateralized loan.

Summary

• LGC Holdco, managed by Cruden 2, LLC, and controlled by Lachlan K. Murdoch, now beneficially owns 85,372,810 Class B Common Shares of Fox Corporation, representing approximately 36.2% of the outstanding Class B shares.
• This ownership was established through a series of transactions, including the transfer of shares from the Murdoch Family Trust to LGC Family Trusts, which then contributed them to LGC Holdco on September 7, 2025.
• On September 10, 2025, LGC Holdco completed a private purchase of 34,268,895 Class B Shares and 9,498 Class A Shares of Fox Corp (along with News Corp shares) from 'Departing Member Trusts' for approximately $1,990 million.
• The private purchase was funded by contributions from LGC Holdco members and a $1,000,000,000 collateralized loan from JPMorgan Chase Bank, N.A.
• The Departing Member Trusts also sold 16,835,016 Class B Shares in an underwritten public offering for approximately $900 million.
• A Stockholders Agreement, effective September 8, 2025, limits the LGC Family Trusts and LGC Holdco, along with certain Murdoch individuals, from collectively owning more than 44% of the outstanding voting power of Class B Shares.

Sentiment

Score: 7

Explanation: The filing indicates a strategic consolidation of ownership by Lachlan K. Murdoch's entities, which can be seen as a positive for long-term stability and strategic direction. However, the use of significant leverage through a margin loan introduces financial risk, balancing the overall sentiment.

Positives

• Consolidation of a significant ownership stake in Fox Corporation's Class B Common Stock by entities controlled by Lachlan K. Murdoch, potentially strengthening family control and long-term strategic alignment.
• The private purchase and related transactions demonstrate a clear strategic move to restructure family holdings and maintain influence over Fox Corp.
• The $1 billion collateralized loan provides substantial funding for the acquisition, indicating financial institution confidence in the underlying collateral (Fox and News Corp shares).

Negatives

• The use of a $1 billion collateralized loan introduces leverage and associated risks, including potential margin calls if collateral values decline.
• The 'Departing Member Trusts' sold a significant portion of their Class B shares, which could be interpreted as a reduction in their commitment to the company.
• Redacted information in the loan agreement (e.g., specific collateral value thresholds, default rate, net worth requirements) limits full transparency for external analysis.

Risks

• Collateral Shortfall Risk: If the value of the pledged Fox Corp (FOX) and News Corp (NWS) shares decreases, LGC Holdco may be required to deposit additional collateral or prepay the margin loan.
• Forced Sale of Collateral: The Bank can force the sale of pledged securities without prior notice to cure a collateral shortfall, potentially at unfavorable market prices.
• Loss of Control over Collateral Liquidation: LGC Holdco is not entitled to choose which securities are liquidated by the Bank in the event of a collateral shortfall.
• Changes in Collateral Eligibility/Value: The Bank can change the eligibility or assigned value of collateral without advance notice, which could trigger a collateral shortfall.
• Adverse Tax Consequences: The forced sale of securities could result in adverse tax consequences for LGC Holdco.
• Loss of Potential Appreciation: Assets sold to meet margin calls would no longer be available for future appreciation.
• Leverage Risk: The $1 billion margin loan increases LGC Holdco's financial leverage, making it more susceptible to market downturns affecting the value of its pledged assets.
• Ownership Concentration Risk: The concentration of a significant stake in the hands of a few entities, while potentially stabilizing, also concentrates risk.
• Regulatory Compliance Risk: Failure to comply with Regulation U of the Federal Reserve Board or other securities laws could lead to penalties.
• Event of Default: Various conditions, including failure to pay, breach of agreements, insolvency, material adverse effect, or failure to maintain net worth, could trigger an event of default, leading to acceleration of the loan and potential liquidation of collateral.

Future Outlook

The Reporting Persons intend to continue reviewing their investment in Fox Corporation on an ongoing basis and may take actions including communicating with the board and management, evaluating strategic alternatives such as mergers, acquisitions, or changes in business, operations, strategy, or governance. Lachlan K. Murdoch, as Executive Chair and CEO, is expected to have influence over corporate activities and may acquire or dispose of Class A Shares or equity awards at his discretion.

Management Comments

• The Reporting Persons initially acquired the Class B Shares for investment purposes.
• The Reporting Persons intend to continue to review their investment in the Issuer on an ongoing basis and, in the course of their review, may take actions... with respect to their investment or the Issuer.
• Lachlan K. Murdoch serves as Executive Chair and Chief Executive Officer of the Issuer. Accordingly, Mr. Murdoch may have influence over the corporate activities of the Issuer...

Industry Context

This filing reflects a significant internal restructuring of ownership within the Murdoch family's holdings in Fox Corporation, a major player in the media industry. While not directly addressing broader industry trends, the consolidation of control by Lachlan K. Murdoch could signal a more unified strategic direction for Fox Corp in a rapidly evolving media landscape characterized by increasing competition, digital transformation, and content streaming wars. The transaction also highlights the continued importance of traditional media assets within diversified family portfolios.

Corporate Governance

Related Party Transactions

• The transfer of Class A and Class B shares from the Murdoch Family Trust to the LGC Family Trusts and Departing Member Trusts.
• The private purchase of Fox Corp and News Corp shares by LGC Holdco from the Departing Member Trusts for approximately $1,990 million.
• The Stockholders Agreement between Fox Corporation, LGC Holdco, LLC, and the LGC Family Trusts.

Stakeholder Impact

• Shareholders: The consolidation of a significant Class B voting stake by Lachlan K. Murdoch's entities could lead to more stable long-term strategic direction but also concentrates voting power. The 44% voting power cap in the Stockholders Agreement provides some clarity on control limits.
• Management: Lachlan K. Murdoch, already Executive Chair and CEO, gains further solidified control through these ownership changes, potentially streamlining decision-making.
• Creditors (JPMorgan Chase Bank, N.A.): The bank is secured by a substantial pledge of Fox and News Corp shares, mitigating risk for the $1 billion loan, but is exposed to market fluctuations in the collateral value.
• Murdoch Family Members: The transactions represent a significant restructuring of family wealth and control, with some members (Departing Member Trusts) liquidating a portion of their holdings.

Next Steps

• Reporting Persons will continue to review their investment in Fox Corporation.
• Potential actions include communicating with the Board and management, and evaluating strategic alternatives (e.g., mergers, acquisitions, changes in business or governance).
• Lachlan K. Murdoch may acquire additional Class A Shares or equity awards and dispose of Class A Shares or settle awards from time to time.

Key Dates

Recommendation

The filing details a significant internal restructuring of ownership within the Murdoch family, consolidating a substantial stake in Fox Corporation's Class B shares under Lachlan K. Murdoch's control. While this could provide long-term stability and strategic alignment, the use of a $1 billion collateralized loan introduces leverage and associated risks, such as potential margin calls. The 44% voting power cap in the Stockholders Agreement also provides a defined limit to the consolidated voting power. Given these factors, the immediate impact is more about internal control and financial structuring rather than a direct operational or financial performance catalyst. Therefore, a 'hold' recommendation is appropriate as investors assess the long-term implications of this ownership structure and the company's future strategic direction under this consolidated control, while being mindful of the added financial leverage.

Keywords

Fox Corporation, FOX, Class B Common Stock, Schedule 13D, Beneficial Ownership, Lachlan K. Murdoch, Murdoch Family Trust, LGC Holdco, Cruden 2, Margin Loan, JPMorgan Chase, Corporate Governance, Shareholder Agreement, Media Industry, Investment, Equity Stake