Rupert Murdoch. REUTERS/Lucas Jackson
Rupert Murdoch's News Corp has confirmed it is selling
out of New Zealand's Sky Television.
Sky TV shares have gone into a trading halt this morning as
the media group sells its 43.6 per cent stake into the market
at a price of $4.80 - a 7 per cent discount to its $5.17
close on Friday.
The price gives News Corp's 169.8 million shares a total
value of $815 million.
At the close of trading on Friday the market capitalisation
of Sky TV was listed at $2.01 billion.
The deal is understood to have been tendered by News Corp and
investment banks Deutsche Bank and Craigs Investment Partners
are underwriting the deal.
No cornerstone shareholder is expected to take a stake in
excess of 19.9 per cent - a level that would require a full
takeover offer to be made.
Another substantial shareholder - the Todd family - sold its
11.11 per cent stake in Sky TV in November last year to
Credit Suisse, which on-sold it to institutions and private
investors.
That block of shares was sold at $5.05 a share for about $218
million.
It has been the dominant shareholder in Sky TV since late
1999 when it took control through newspaper company INL.
Last month Sky TV reported a 9 per cent gain in first-half
profit as subscribers migrated to its MySky premium service
and spent more.
Profit rose to $68.2 million in the six months ended December
31, from $62.7 million a year earlier. Sales rose 3.9 per
cent to $443 million.
An announcement just made to the NZX today that it had
appointed Deutsche Bank to underwrite and, together with
Craigs Investment Partners, to manage, the sales of its Sky
shares. It is expected that the shares will be sold to a
broad range of institutional and retail investors.
Following the sales, News Limited will no longer have any
holding in Sky Network Television Limited.
Michael Miller, Regional Director of News Limited, will
resign from the board of Sky and the company's shares are
expected to start trading again no later than Wednesday 6
March.
Total subscribers to Sky TV's services were little changed at
846,988 at December 31 from a year earlier, though the number
on MySky climbed 28 per cent to 423,973. Average revenue per
subscriber rose to $75.78 at December 31 from $71.81 a year
earlier.
Murdoch's investment in a German pay TV channel late last
year fuelled speculation he might sell out of Sky here.
Sky was formed in 1990 by a group led by Craig Heatley with
three UHF channels in the upper North Island and struggled in
its early years.
The on market selldown of Sky TV also follows media group
Fairfax's $769 million selldown of Trade Me in December.
This latest selldown will further add to the depth of the
local market and gives the NZX another boost as it prepares
for the partial float of Mighty River Power.
Murdoch's News Corp is a global media giant which owns 20th
Century Fox, the Fox News cable channel as well as newspapers
like the Wall Street Journal. It is the parent company for
Australian publishing group News Ltd - which owns the
Australian and Sydney's Telegraph - and British-based News
International, publisher of the Sun and the Times.
- Liam Dann of the New Zealand Herald
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