News Corp. Nears MySpace Deal
Amid low bids and dropped-out suitors, the conglomerate is likely to opt for a partnership rather than an outright sale, according to a report.
NEW YORK - Rupert Murdoch's News Corp. is nearing a decision on a deal for MySpace, with a strategic partnership appearing more likely than an outright sale, the Wall Street Journal reported Monday, citing people familiar with the situation.
Under such a deal structure, the entertainment conglomerate would retain a stake in MySpace. It has over the past few months looked at various deal options, including such a structure.
News Corp. started accepting bids for MySpace around April, but many bids came in below the $100 million that the company was looking for, the Journal said.
The company hopes to narrow the number of offers in the next two weeks, according to the Journal. A deal could be finalized by the end of the month.
The social network, which News Corp. acquired for $580 million in 2005, has seen a lack of bidders willing to buy it outright for a high price, said the Journal, which is also owned by News Corp.
At least two companies that were considering bids, private equity firm Thomas H. Lee Partners in partnership with Redscout Ventures and Criterion Capital Partners, are no longer serious contenders, according to the Journal, which said that a spokeswoman for MySpace declined comment.
The paper said one bidder was surprised by the money News Corp. was still spending on its digital media unit, of which MySpace is part. Among the expenses are $60,000 a month for parking and $800,000 a month on lawyers' fees, the Journal said, citing a person familiar with the situation.