News Corp to Sell its Stake in SKY
News Corporation (NWSA) recently announced that its subsidiary, News Limited, will sell its 44% stake in the New Zealand’s largest subscription based broadcasting company, SKY Network Television Limited.
Though the financial terms of the deal were not disclosed, the company stated that it will sell its holdings to several institutional and retail investors. Post sales, the company will not have any stake in the SKY Network Television Limited.
News Corporation is focused on managing its global brands independently to generate positive cash flows while significantly expanding digital opportunities. In a similar move, the company ended its 16 year-old Asian sports joint venture with The Walt Disney Company (DIS).
The move comes at a time when News Corporation is on the verge of splitting its operations into 2 separate publicly traded publishing and entertainment entities.
This Zacks Rank #3 (Hold) stock is focused on creating a much more profitable entity including Fox broadcasting, cable network, Fox News Channel, the 20th Century Fox movie studio, BSkyB, Sky Italia, Sky Deutschland, and pay-TV operations in Europe and India.
The split is expected to augur well for News Corporation, which has been in troubled waters since the revelation of the phone hacking scandal that eventually led to the closure of the publication of ‘The News of the World’. Moreover, the company was held back from acquiring the remaining 61% stake in the British Sky Broadcasting Group.
Moreover, in the past, there have been instances when companies like CBS Corporation (CBS) and Time Warner Cable Inc. (TWC) split into two separate entities in order to capitalize on untapped potential.
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