News Corp. Sheds Aussie Garb

News Corp. has previously said it expects the reincorporation would overcome many U.S. institutional investors' reluctance to hold foreign companies' stock and preferred stock. As part of the move, that preferred stock will be converted into nonvoting common stock.

News Corp. also has said it believes that the U.S. reincorporation will increase demand for its stock, thus narrowing the trading discount of the preferred shares to the voting common stock.

Merrill Lynch's Jessica Reif Cohen called the vote a buying opportunity for longer-term investors, "particularly in advance of demand from a likely S&P 500 listing." Though Cohen says it's difficult to quantify, she says she believes that incremental shareholder demand will supersede forced selling from overseas indices. Cohen has a buy rating on NWS with a $47 price target; her firm has done recent banking for the company.

"Investor attention will also now shift to a potential (and in our view likely) buyout," says Cohen of the 18% stake in the U.S. entertainment subsidiary Fox (FOX Quote) that News Corp. doesn't already own. "However, this view is now widely disseminated," says Cohen, "and we believe, is largely in the stock."

Fox's shares fell 20 cents Tuesday to trade at $28.94.