Rupert Murdoch appears set to bring his daughter Elisabeth back into the family fold, with reports suggesting News Corp will buy Elisabeth Murdoch’s television production company Shine for up to $1 billion, in what may be a highly controversial transaction.
Elisabeth appointed investment bank JP Morgan in January to examine options for the business, which is best-known in Australia for being behind the formats for programs including Masterchef and The Biggest Loser.
She owns 53% of the business, with other stakes held by Sony Entertainment and BSkyB, which is also part-owned by News Corporation.
Shine was set up in 2001, after Elisabeth Murdoch left BSkyB where she was head of content. The business launched an Australian operation last year.
Reports about the price on offer for Shine differ wildly.
London’s Evening Standard newspaper says the price could be as high as £700 million ($1.1 billion) while a report in Bloomberg suggests the price could be £800 million ($1.3 billion).
However, the FT is reporting the price could be around £400-500 million ($637 million to $796 million) and an article in the Guardian says the price may somewhere “in excess” of £300 million ($477.8 million).
If the price does exceed $1 billon, it would appear to represent an extremely bullish valuation for the business.
According to figures quoted by The Guardian, the business had revenue of just under $410 million in 2009 (the latest available figures) with net profit of $8.8 million, although revenue is likely to have increased in the last 12 months.
There is also likely to be controversy over the fact this is very much a related-party transaction. Elisabeth Murdoch currently attends News Corporation board meetings as an “observer” and there is already speculation that she would take up a full board seat if the Shine deal goes through.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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