News Corp seals $2.1 bn Australia pay-TV deal
The deal will double the stake of News Corp's Australian arm in dominant pay-TV operator Foxtel to 50 per cent and give it 100 per cent of content provider Fox Sports, increasing its pay-TV exposure at the same time as it cuts costs at its print operations.
Consolidated Media said shareholders at a meeting on Wednesday voted 99.9 per cent in favour of the takeover.
Its board had backed the offer.
Foxtel and Fox Sports are going to be two cornerstone assets in the News Corp publishing business after the demerger, and I assume the market will put fairly healthy multiples on those assets, said Citi analyst Justin Diddams.
News Corp announced plans in June to split the $60 billion media conglomerate into two publicly traded companies, publishing and entertainment. The split will take about a year to complete.
The publishing arm will include Australian newspaper The Australian, UK newspapers The Times and The Sun, The Wall St Journal, book publisher Harper Collins, and pay-TV assets including Fox Sports, Foxtel and Sky TV New Zealand.
After the takeover of Consolidated, pay-TV -- including affiliates such as Foxtel -- would contribute 39 per cent of News Corp's publishing company revenues in fiscal 2014, CLSA analyst Digby Gilmour said in a note to clients last week.
Gilmour estimated that Fox Sports would contribute 11 per cent of publishing
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