Rupert Murdoch called off his -effort to merge the two parts of his media empire, News Corporation (NasdaqGS:NWSA) and Fox Corporation (NasdaqGS:FOXA), saying the transaction "is not optimal" for shareholders of the companies at this time. Mr. Murdoch proposed reuniting News Corp. and Fox last northern autumn, almost a decade after they split apart.

In statements on Tuesday, the boards of the two companies said they had received a letter from Mr. Murdoch withdrawing the proposal. Fox owns Fox News and the Fox broadcast network, along with local TV stations and the Tubi streaming service. News Corp.

is the parent company of Dow Jones, publisher of The Wall Street Journal, as well as other assets including HarperCollins Publishers and news -organisations in the UK and Australia. News is the publisher of The Australian. News Corp.

has weighed other strategic options besides a merger with Fox, including the sale of its digital real estate assets, people familiar with the situation said. The company has had advanced discussions about selling its 80% interest in Move, which operates Realtor.com, the sources said. News Corp.

also owns a stake of almost two-thirds in Australian digital real estate firm REA Group. People familiar with Mr. Murdoch's thinking about the merits of merging Fox and News said the companies could benefit from being bigger and that the combined entity would have had more balance sheet strength to pursue acquisitions. The companies also could have joined forces in areas such as sports betting, the sources said.

Some large investors were sceptical of the proposed deal. In November, the Journal reported Independent Franchise Partners, a London-based investment firm and one of the largest non-Murdoch holders of both News and Fox, opposed the recombination, arguing it wouldn't realise the full value of News. T. Rowe Price, a large News Corp.

shareholder, raised concerns with the company and its board about how such a deal would value News. In a letter to News Corp.'s board, shareholder Irenic Capital wrote that "a combination with Fox does not serve News Corp.'s strategic goals". The letter also noted that "Fox is subject to litigation that may result in billions in costs".

On Tuesday, Irenic Capital co-founder Adam Katz said: "This is the right decision. Looking ahead, News Corp. has an opportunity to create substantial value for its owners." Special committees of the Fox and News boards that had been set up to review the proposed merger had been dissolved.

Mr. Murdoch is executive chairman of News Corp. and chairman of Fox. His son Lachlan Murdoch is co-chairman of News Corp.

and executive chairman and chief executive of Fox. The Murdoch family trust has voting stakes of roughly 39% in News Corp. and 42% in Fox, according to filings.

For a deal to have moved forward, a majority of the non-Murdoch-family shareholders would have had to approve it.