News Corp. to reduce stake in NDS

Deal with Permira will take firm private

Rupert Murdoch's News Corp. will reduce its stake in NDS Group to 49% in a deal unveiled late Friday with private equity firm Permira Advisers that will take the pay TV technology firm private.

The proposed transaction, which values NDS at $60 per American depository share, will reap News Corp. cash of approximately $1.5 billion and a $200 million note. The media conglomerate has been moving out of non-core assets and redeploying money into new and fast-growing businesses.

NDS has been a partner for News Corp.'s current satellite TV holdings, as well as DirecTV, which the company recently sold to John Malone's Liberty Media.

A News Corp. spokesman declined to say how the company may deploy the cash from the NDS deal. However, the Wall Street Journal said Friday that News Corp. is not only considering a bid for German pay TV giant Premiere AG, in which it already owns a stake, but also in Spain's Digital+ satellite platform. The two together would likely cost more than €4 billion ($6.3 billion), the Journal said.

News Corp. currently owns approximately 72% of the equity and 96% of the voting power in NDS, but will reduce that to a minority position in the proposed deal.

In a statement, News Corp. said the transaction is "an excellent opportunity for public shareholders to exit an illiquid investment at an attractive price in a very challenged financing and economic market environment."

The $60 per share price tag represents a premium of 20.7% over Friday's closing price of $49.70 per American depository share on Nasdaq. When taking into consideration that part of NDS' value is based on its cash balance of $696 million, the premium rises to 27.1%.

NDS ADSs closed down 1.6% Friday at $49.70. News Corp. voting shares hit another 52-week low of $15.53 before closing down 2.8% at $15.73.
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