Rupert Murdoch has withdrawn his proposal to re-combine Fox Corp and News Corp.

Fox said Tuesday its board received a letter from Murdoch, its chairman, and his son and Fox CEO Lachlan Murdoch that “determined that a combination is not optimal for the shareholders” of either of the companies at the time.

The withdrawn proposal comes as News Corp has been in advanced discussions to sell its stake in Move Inc., the parent company of Realtor.com, to commercial real estate company CoStar Group, according to a person familiar with the matter.

Spokespeople for News Corp and CoStar didn’t immediately respond to comment on the matter. Reuters first reported the deal talks.

In addition to Wall Street Journal Publisher Dow Jones, News Corp also owns real estate assets such as book publisher HarperCollins and the New York Post. In 2014, News Corp acquired an 80% stake in Move. REA Limited Group, an Australian real estate business that News Corp holds a 61.6% interest in, acquired the remaining 20% stake in Move.

News Corp CEO Robert Thomson told employees Tuesday the decision to call off the proposed deal would have no impact on employees, according to a memo reviewed by CNBC. He also urged them to keep tight-lipped about the matter.

“As I advised at the beginning of this process, it is best not to speculate on speculation, and so if you do hear from any media, shareholders, customers or others, please alert the communications team in your business,” Thomson wrote.

In October, the companies said they had formed a special committee to consider the deal.

A combination of the two companies would have unified leadership in Murdoch’s empire and cut costs at a time when the audience is shrinking for both print and TV media. News Corp owns Wall Street Journal publisher Dow Jones. Fox, with what was left over from the $71.3 billion Twenty-First Century Fox sale to Disney in 2019, owns right-wing networks Fox News and Fox Business, which is a CNBC competitor.

Murdoch had split up the companies in 2013. The Murdoch family trust controls about 40% of the voting rights of both companies.

At the time, the thinking behind the reunion would have been to simply give the merged company greater scale to compete at a time when media companies are competing for subscribers and digital advertising spending, CNBC previously reported.

The potential merger had faced opposition from shareholders in recent months, who didn’t believe a merger would show the true value of News Corp. if it merged with Fox.

Some shareholders, like Independent Franchise Partners, believed the merger wouldn’t have realized the full potential value of News Corp, and other alternatives, such as a breakup of News Corp, should have been considered. The London firm is one of the largest shareholders in both News Corp and Fox that isn’t Murdoch.

Irenic Capital Management was another shareholder that pushed back on the proposed merger, saying Fox didn’t serve News Corp’s strategic goals. Both Irenic and Independent Franchise believe News Corp shares are undervalued. Class A shares of Fox closed at $32.67 on Tuesday, while News Corp’s Class A shares closed at $19.53.

–CNBC’s Gabrielle Fonrouge contributed to this article.