News Corp to buy Shine Group

Father-daughter team Rupert and Elisabeth Murdoch are keeping it all in the family, with the announcement that News Corp will be acquiring 100% of Shine Group for US$671 million.
February 23, 2011

News Corporation and Shine Group have reached an agreement in principle for Rupert Murdoch’s multi-billion dollar global media company to acquire 100% of daughter Elisabeth Murdoch’s international TV production operation for £415 million, or US$671 million.

The announcement follows the news last month that Shine had retained JP Morgan to advise the company on “strategic options and growth opportunities” and that News Corp, as well as other companies, were in talks with Shine. With 25 international production companies under its umbrella, as well as its distribution arm Shine International, the company’s worth was projected between £600 million and £800 million. Prodcos within the Shine Group include Reveille, Dragonfly, Metronome and MasterChef producers ShineTV (Shine TV, Reveille and Gordon Ramsay’s One Potato Two Potato are producing the U.S. version of the show, pictured).

“In a rapidly consolidating global TV industry, this alliance uniquely provides the conditions in which Shine Group can continue to lead and prosper,” said Shine Group chairman and CEO Elisabeth Murdoch in a statement. “News Corporation is the partner that enables us to maintain our aspiration to be best in class across all our sectors, and prepares and equips us for future growth. Shine shares News Corporation’s long-standing belief in creative excellence and ambitious expansion. I could not be happier or more proud that from such modest beginnings Shine will join such an extraordinary group of companies.”

“Shine has an outstanding creative team that has built a significant independent production company in major markets in very few years, and I look forward to them becoming an important part of our varied and large content creation activities,” offered her father. “I expect Liz Murdoch to join the board of News Corporation on completion of this transaction.”

The companies have signed a letter of intent and are now moving forward with the necessary regulatory filings. Upon completion of the transaction, Shine Group will report to Chase Carey, deputy chairman, president and chief operating officer of News Corp. “This is a unique and exciting opportunity for us,” said Carey of the deal. “Shine is a leader in the global television production business with a proven track record of developing hit shows and new formats worldwide.”

Currently, Liz Murdoch controls 60% of Shine Group, with Sony Pictures Television owning 20%, BSkyB owning 13%, and the remainder of the shares divided amongst management. The Guardian reports that Liz Murdoch intends to remain as Shine CEO, and also highlights the fact that if she does join the News Corp board as voting member, Shine will no longer be a “qualifying independent” when it comes to the output quotas of UK public broadcasters such as the BBC, Channel 4 or ITV.

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