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. Last Updated: 07/27/2016

News Corp. in $1.43Bln Cable Deal




NEW YORK -- Rupert Murdoch's News Corp. plans to buy out Liberty Media Corp.'s portion of Fox/Liberty Networks in a $1.43 billion stock swap, greatly expanding the media giant's presence in cable television.


The deal announced late Monday evening will allow News Corp. to gain control of the regional sports network Fox Sports Net, which reaches more than 62 million households, and entertainment network FX, which reaches more than 39 million households, and other related businesses.


In exchange for its 50 percent interest, Liberty will receive about 51.8 million nonvoting American depositary receipts in News Corp. worth about $1.43 billion based on Monday's closing stock prices on the New York Stock Exchange.


ADRs are used by foreign companies to trade shares on U.S. exchanges. News Corp. subsidiary Fox Entertainment Group Inc. owns the other 50 percent of the network. Once the deal is approved, expected to be by June, News Corp. will transfer its interest to Fox, giving the subsidiary 100 percent control.


"In acquiring Liberty's interest in these properties, News Corporation has firmly established itself as the leader in original cable programming and distribution,'' said Murdoch, News Corp.'s chairman and CEO. "This deal will enable us to leverage more fully the Fox brand across our cable and broadcast properties while giving us added flexibility over our sports and entertainment channels.''


Fox/Liberty also has interests in more than a dozen regional sports channels as well as in cable networks including Speedvision, Outdoor Life Network and the Golf Channel.


Speculation about the deal has been swirling for several days after reports published last week by several newspapers, including the Los Angeles Times and The New York Times, pushing the prices of the ADRs to a 52-week high. In New York, shares rose $3.31 1/4, or 11 percent, to $33.87 1/2 on Monday.


The Australian share market soared into record territory on the back of a jump in the shares of News Corp.


The benchmark all ordinaries index was well over the key 3,000 level in the early afternoon, surging by more than 1.5 percent, or 49.8 points, to 3,022.8.


It hit a new intraday high of 3,027.8.


The overall market rise followed a return to the board by News Corp. after the stock was suspended during Tuesday morning trading before its statement that it had struck the Liberty Media deal.


It wasn't clear from the statement released by News Corp. if it was also buying Liberty's share of the partnership's 40 percent interests in the New York Knicks basketball team, hockey's New York Rangers, and Madison Square Garden and Radio City Music Hall in New York City, as previous reports indicated.


Calls to News Corp. and Liberty Media were not immediately returned.


News Corp. is one of the world's largest media companies with operations in the United States, Canada, Britain, Australia, Latin America and the Pacific Basin. Its 1998 revenue was $14 billion.


A member of Saudi Arabia's royal family said Tuesday that he had acquired new shares in News Corp., Reuters reported in Riyadh.


"Prince Alwaleed bin Talal bin Abdul-Aziz al-Saud, chairman of Kingdom Holding Co., announced Tuesday the purchase of an additional $200 million of News Corp. preferred shares bringing the total value of his highness' shares to more than $800 million," his firm said.


The Saudi prince confirmed his acquisition as part of the Liberty Media deal announced earlier Tuesday in Sydney, Australia.