News Corp in Unsolicited Offer for Fox Entertainment
January 10, 2005
Cleary Gottlieb is representing Goldman Sachs and J.P. Morgan as co-advisors to News Corporation in its unsolicited offer to exchange $6 billion of News non-voting stock for the publicly held stock of its 82% subsidiary, Fox Entertainment Group. The transaction is subject to the condition that a majority of Fox shares not already held by News or by the officers or directors of News or Fox be tendered. If the tender condition is satisfied and the exchange offer completed, News will be committed to acquiring the remaining Fox shares in a short-form merger. News launched the exchange offer today and has initially set the offer’s expiration date for February 7.
This transaction marks the third major “minority buyout” involving the cable industry in the past several months. The other two deals were the $1 billion exchange offer for UGC Europe (also known as United Pan Europe Communications) by Liberty Media affiliate Unitedglobalcom, and the $8.5 billion tender offer for Cox Communications by Cox Enterprises. Cleary Gottlieb was counsel to the target’s Special Committee or its financial advisor in each of these transactions.
News, with $52 billion of assets and annual revenues of $20 billion, has a range of international media and entertainment holdings, including Fox, DirecTV, Fox News and Sports, The Sun, The New York Post, HarperCollins, Sky, The Times, TV Guide, InsideOut, NDS Group and Twentieth Century Fox.
Fox is principally engaged in the development, production and worldwide distribution of cable network programming, feature films and television programs, and television broadcasting. It has total assets of approximately $31 billion and total annual revenues of approximately $12 billion. Fox’s broadcasting and cable networks provide extensive distribution platforms for its programs.