Rupert Murdoch’s News Limited, is quitting its stake in New Zealand’s Sky Network Television for $815.3 million through an underwritten placement to institutional investors at a 7.2% discount.
Sky TV’s shares halted after News Limited, the Australian branch of News Corp, said it will sell its 44% stake in the Auckland-based firm in a placement underwritten and managed by Deutsche Bank and Craigs Investment Partners, according to a statement to the stock exchange.
The $4.80 price was later published in a real shareholder notice. The shares last traded at $5.17.
“It’s a reasonable discount without being overly generous – they don’t need to be in a market that has supply issues and a lot of demand,” said Grant Williamson, a director at Hamilton Hindin Greene. “It’s a very large placement for the market, and we’re seeing some selling stocks this morning, to raise money for it.”
The NZX 50 index fell 1.1% to 4272.43 on turnover of $86.1 million.
The stake was sold ahead of the global media group’s split along print and broadcasting lines later this year.
Murdoch’s News Corp is the world’s second largest media conglomerate, and owns Dow Jones and Company, the publisher of the Wall Street Journal, as well as the Fox News channel.
“We and Sky have always enjoyed an excellent, arm’s-length working relationship and we expect this to continue,” News Corp president and chief operating officer Chase Carey said.
Murdoch’s exit from the pay-TV firm comes four months after New Zealand’s billionaire Todd family, sold its 11% stake for $218 million at $5.05 a share.
That was a discount of 5.8% at the time. News Limited took the cornerstone stake in Sky TV via a merger with Independent News Ltd in 2005.
The sale also 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 Limited 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, Sky TV posted a 9% gain in first-half profit as subscribers migrated to its My Sky premium service and spent more, with a subscriber base at 846,988.
Rupert Murdoch, born 11 March 1931, is a world renown multi billionaire and a savvy business man (obviously).
My question about him selling his shares is, why now? And nobody seems to want to share that reason with the media. It’s not like Rupert Murdoch needs the money. Is he tidying up finances? If so, what for?
As a New Zealander I often wonder, where we would be, if he was our Finance Minister. I mean, he obviously knows money. He certainly couldn’t do any worse than, Prime Minister John Keys.
What does Rupert Murdoch and the Todd Family know that we don’t about the New Zealand Sky Network?
Contributions by Debra Wattes