News Corp. Gains; Plans for Sky Global IPO Next Month
(Update1)
By Andrew Harrison
Sydney, Sept. 13 (Bloomberg) -- News Corp. shares rose 4.5 percent to a 5 1/2 month high after Credit Suisse First Boston said the world's No. 5 media company may sell shares in its Sky Global Networks Inc. satellite-TV unit in an initial offering next month.
Sky Global, the largest worldwide satellite-TV provider, owns the Star system in Asia, News Corp.'s 40 percent stake in British Sky Broadcasting Plc, its 44 percent stake in TV Guide Inc., Foxtel in Australia, the Latin American Sky TV, Sky Perfect in Japan, and Stream in Italy.
``The market is pretty convinced that this can release some value within the group,'' said Adrian Mulcahy, who helps manage A$300 million ($168 million) in Australian equities at Perennial Investment Partners Ltd. in Melbourne. ``There had been signals to the market that the deal was never going to come about.''
News Corp. shares rose A$1.093, or 4.5 percent, to A$25.193, the highest close since March 24. They have risen 7.4 percent in the last two days after two News Corp. executives yesterday told a CSFB-sponsored luncheon in Sydney that the Sky Global promotion would begin in the second half of October. News Corp. Executive Vice-President of Investor Relations Gary Ginsberg and Vice- President of Investor Relations Reed Nolte attended the lunch.
``It appears as though (Sky Global's initial offering) is progressing reasonably on track,'' said Pano Raftopoulos, who manages A$600 million in Australian equities at Challenger Professional Investment Management Ltd.
In June, News Corp. said in statement filed with the U.S. Securities and Exchange Commission that Sky Global would sell Class A common shares to the public. News Corp. would hold Sky Global's Class B multiple voting stock.
Analysts have estimated the offering could raise as much as $5 billion, which would make it the largest ever in the media industry and one of the biggest in the U.S. The filing used a nominal estimate of $100 million to calculate the proceeds from the IPO.
The satellite company has been valued by analysts at as much as $50 billion.
Each of the Class A shares sold to the public will have one vote each. News Corp. will retain control of the company through its Class B shares, which will have 10 votes each.
Sky Global will use the proceeds from the IPO partly to repay debt owed to a subsidiary of News Corp. Sky Global owed $2.8 billion to News Corp. as of March 31, according to the SEC filing. The company also will devote some of the money to support growth and meet general corporate requirements.
The sale is already being underwritten by two of the world's biggest investment banks Goldman, Sachs & Co. and Merrill Lynch & Co., who'll throw their weight behind finding the best tie-up. |
