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MUMBAI:
News Corporation has completed its $2 billion acquisition
of Australia media company Consolidated Media Holdings, which
holds 50 per cent of Fox Sports and 25 per cent of Foxtel.
News
Corp had on 20 June made a $2 billion bid to wrest control
of CMH which would give it a greater share of Australia's
pay television market. CMH's board backed the offer in the
absence of a higher bid.
The
buyout will see the exit of Australian billionaire James Packer
from media business as he sets out for a bigger play in the
gambling business. Packer, the son of late media baron Kerry
Packer, held 50.1 per cent stake in the CMH.
The
deal will give News Corp's Australian subsidiary News Limited
a complete ownership of Fox Sports, an equal joint venture
partnership between Consolidated Media and News Corp, and
a 50 per cent stake in pay TV operator Foxtel, which is half
owned by Australian telecom and media company Telstra Corporation
with News Corp and CMH holding a 25 per cent stake each.
As
per the agreement, News Limited and News Pay TV Financing
(News), 100 per cent owned subsidiaries of News Corporation,
will acquire CMH for $3.45 cash per share by way of a scheme
of arrangement.
The
scheme consideration of $3.45 represents an implied multiple
of 9.4x EV/Ebitda based on a proportional consolidation of
CMH's main investments in Foxtel and Fox Sports.
CMH's
major shareholders CPH executive chairman James Packer said,
"I am delighted that CMH and News have reached agreement
on the terms and conditions, and as I said in June, CPH will
support the Scheme in the absence of a superior cash proposal.
In my view, this is a great outcome for CMH shareholders and
for News and it reflects a fair price."
The
implementation of the Scheme is subject to a number of customary
conditions including CMH shareholder and Court approvals.
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