News Corp is to partner with private equity firm Permira to take its majority-owned technology subsidiary NDS Group plc out of public ownership. News Corp currently owns 72% of NDS and controls 96% of voting rights. The deal subject to share holder approval will see Permira taking over control paying News Corp $1.7 billion in cash and debt for a 51% share. News Corp will retain a 49% stake. Other share holders will receive $60 per share, a 20.7% premium on their value at close on Friday June 27.
Our take...
News Corp relies on NDS to provide conditional access and interactive TV solutions for its pay TV operations and with it retaining a 49% stake in the company this relationship is not expected to change. This deal will free up some cash for News Corp which could be spent on rumored pay TV operator acquisitions. Given NDS' close relationship with News Corp this could lead to new technology deals for NDS. NDS will no longer have to answer to share holders which could lead to changes in its operation.
