News Corp. Exits New Zealand’s Sky Network in Share PlacingChris Bourke
News Corp. arranged to sell its 44 percent stake in Sky Network Television Ltd., New Zealand’s largest pay-TV operator, in a share placement as the company prepares to split its publishing and entertainment units.
News Ltd., a unit of Rupert Murdoch’s media company, appointed Deutsche Bank AG and Craigs Investment Partners to sell the holding, according to a statement from Sky Network today. The shares are being sold at NZ$4.80 each, valuing the stake at NZ$815 million ($671 million), according to a person familiar with the matter, who asked not to be identified because the issue is private. Trading was halted in Sky shares, which closed at NZ$5.17 on March 1.
News Corp. plans to separate its television business from the declining publishing division by the middle of this year. Sky Network wasn’t regarded as a core asset and the stake’s sale will help free up capital ahead of the split, said Alice Bennett, an analyst at Commonwealth Bank of Australia.
News Corp. is “just tidying up, so when the demerger happens there’s less assets that they hold minority stakes in,” Bennett said by telephone. The Sky Network sale is “making it a cleaner and simpler company,” she said.
The shares will be sold to “a broad range of institutional and retail investors,” News Ltd. said in the statement. It will have no holding in Sky Network following the sale.
News Corp. shares rose 27 Australian cents, or 0.9 percent, to A$28.79 in Sydney at 12:36 p.m.
“We and Sky have always enjoyed an excellent, arms-length working relationship and we expect this to continue unaffected by the sale,” Chase Carey, president and chief operating officer of News Corp., said in the statement. No changes to content or technology agreements are expected, he added.
Michael Miller, New Zealand’s regional director of News Ltd., will resign from Sky Network’s board, according to the statement.
The sale, first reported by the Australian Financial Review, is scheduled to close at 3 p.m. Sydney time today, the person said.