News Corp. to Buy Shine Group for $663 Million

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Rupert Murdoch's News Corp. is to acquire the entirety of Shine Group, owned by daughter Elisabeth Murdoch.

 

LONDON -- It’s official: the prodigal daughter is heading home, and she’s taking a pretty cash cow back with her.

A decade after decisively striking out on her own merits by setting up her own U.K.-based production company, Elisabeth Murdoch is selling her international production outfit Shine to News Corp. for $663 million and returning to the family fold.

The companies said that they had reached an “agreement in principle” with all the shareholders and have signed a non-binding letter of intent ahead of completing the regulatory filings required.

Elisabeth Murdoch owns 53 percent of the company outright, while Sony Pictures Television has 20 percent and BSkyB has 13 percent. The remaining shares are with management, and on completion Sony and BSkyB will exit.

The deal values Shine at less than the $1 billion mark that some commentators had thought it at, and comes as News Corp. is still in a high stakes bid to acquire 100 percent control of BSkyB, a deal that could be worth $12 billion.

But News/Shine acquisition will cement Elisabeth’s position within the News Corp. firmament, and raise inevitable questions about the role she may play in the future of the company.

News Corp. chairman and CEO Rupert Murdoch said that he expected his daughter to take a seat on the News Corp. board, and that she would report to News Corp. deputy chairman Chase Carey.

“Shine has an outstanding creative team that has built a significant independent production company in major markets in very few years,” said Murdoch in a statement.

“I look forward to them becoming an important part of our varied and large content creation activities. I expect Liz Murdoch to join the board of News Corporation on completion of this transaction.”

Shine, which in the last two years has acquired a number of international production assets in the Nordic territories and struck out with its own outposts in Germany, France and Australia, has been on a major expansion drive in the past seven years, buying up Spooks and Life on Mars producer Kudos, as well as Ugly Betty producer Reveille.

Elisabeth Murdoch said the deal would give Shine scope to grow further.

“In a rapidly consolidating global TV industry, this alliance uniquely provides the conditions in which Shine Group can continue to lead and prosper,” she said.

“News Corporation is the partner that enables us to maintain our aspiration to be best in class across all our sectors, and prepares and equips us for future growth. I could not be happier or more proud that from such modest beginnings Shine will join such an extraordinary group of companies.”

News Corporation and Shine Group said they “will continue to negotiate the final terms of the long-form stock purchase agreement, which will be subject to customary closing conditions including approval by the audit committee and the full board of News Corporation, receipt of an independent fairness opinion, and Shine Group board approval. “

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