Murdoch's News Ltd to exit Sky TV stake
Murdoch's News Ltd to exit Sky TV stake in sale reported to be at discount
By Paul McBeth
March 4 (BusinessDesk) - Rupert Murdoch's News Ltd is quitting its stake in pay-TV operator Sky Network Television in what's expected to be a discounted sale, ahead of the global media group's split along print and broadcasting lines later this year.
Sky TV's shares were halted after News said it will sell its 44 percent stake in the New Zealand firm in a placement underwritten and managed by Deutsche Bank and Craigs Investment Partners, according to a statement to the stock exchange. No price was given, though media reports have speculated News will reap $815 million at $4.80 a share, a discount of 7.2 percent to Friday's closing price.
"We and Sky have always enjoyed an excellent, arms-length working relationship and we expect this to continue," News Corp president and chief operating officer Chase Carey said. "We do not anticipate any change to current arrangement regarding access to content and collaboration on technology."
Murdoch's exit from the pay-TV firm comes four months after New Zealand's billionaire Todd family sold its 11 percent stake for $218 million at $5.05 a share. That was a discount of 5.8 percent at the time. News took the cornerstone stake in Sky TV via a merger with Independent News Ltd in 2005.
The sale comes as Sky TV's local dominance in the pay-TV market comes under increased focus from the antitrust regulator with the Commerce Commission investigating the TV company's content arrangements with internet service providers.
News Ltd regional director Michael Miller will resign from Sky TV's board as a result of the sale.
The halt will be in place for up to two days to shift the stake.
The stock is rated an average 'outperform' based on nine analyst recommendations compiled by Reuters, with a median target price of $5.535.
Last week, the New Zealand pay-TV operator reported a 9 percent lift in first-half profit to $68.2 million, with a total subscriber base at 846,988.