S&P cloud over News Corp US move

A CLOUD is hanging over the relocation of the headquarters of Rupert Murdoch's News Corp to the United States, with the Standard and Poor's Index Committee considering dumping the stock from Australia's key S&P ASX 200 index.

Without inclusion, News Corp may not get the necessary votes from Australian institutional shareholders to approve the American incorporation of the company.

David Blitzer, chairman of the S&P Index Committee, said today that, depending on the structure, the company may not be included in the index.

'Without understanding the entire structure, it's very hard to evaluate it,' he told ABC radio. 'If it's the same as any American company-which happened to list secondly in Australia, then we would have concerns.'

Standard & Poor's says it does not favour companies being in a key index in more than one country and that it would be highly unusual to allow News Corp to be part of the S&P 500 index in New York while retaining a listing on Australia's S&P/ASX 200 index.

When News Corp announced plans to incorporate in the United States by the end of the year to improve access to US capital markets, it said it would remain in the ASX 200 index.

But Blitzer said that would be unusual. He said S&P does have companies that are included in more than one index, but in 'those cases, the structure is different than what the press has been talking about' regarding News Corp.

It is understood some fund managers would block News Corp's plan to relocate to Delaware if that meant its removal from the S&P/ASX 200.

Blitzer indicated that the ratings agency was looking at other dual-listed companies such as Anglo-Australian miner BHP Billiton.

'Companies are very often dual-listed on stock exchanges but we view that as different from indices and in fact, in the case of BHP Billiton, it's an area that we are looking at,' Blitzer said.