News Corp. Sheds 5.3% Phoenix Satellite
As per a recently announced accord, Star Entertainment Holdings Limited, the wholly-owned subsidiary of News Corp (NWSA) will offload about 5.28% interest in Phoenix Satellite Television Holdings Limited, a Chinese television broadcaster. Following the conclusion of the deal worth $92 million, Star Entertainment will hold about 12.16% stake in Phoenix.
News Corporation, which holds a Zacks Rank #3 (Hold), is on the verge of splitting its operations into 2 separate publicly traded entities.
The Publishing Company (to be known as News Corporation) will comprise publishing businesses, education unit and the integrated marketing services business, with brands like The Wall Street Journal, HarperCollins and Amplify.
The Entertainment Company (to be named Fox Group) will encompass cable and television assets, filmed entertainment and direct satellite broadcasting businesses 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.
News Corporation named Robert Thomson, Editor-in-Chief of Dow Jones and managing Editor of The Wall Street Journal, as the new CEO of its publishing company. Alongside, Michael Florin has been appointment as the Senior Vice President and Head of Investor Relations for the new publishing company.
We believe that the split will 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.
Further, we believe that the split would provide News Corporation with a competitive platform against its peers, The New York Times Co. (NYT), Gannett Co., Inc. (GCI) and The McClatchy Co. (MNI).
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