Rupert Murdoch’s News Corporation has confirmed it will acquire his daughter Elisabeth Murdoch’s production company Shine for $US673 million.
The deal will also see Elisabeth, who last worked within in the News Corp family of companies in 2001, return to the fold. She will officially join the company’s board as a director, and will continue to run Shine within News Corp.
Elisabeth, who owned 53% of Shine, is expected to receive more than $350 million as a result of the sale.
Other major shareholders, including management and electronics giant Sony, will also receive impressive returns on relatively small initial investments.
Rupert’s decision to bring Shine and Elisabeth back inside the News Corp tent is already creating controversy and fresh speculation about who may succeed Rupert when he finally steps aside.
Media analysts in Britain have described the price paid by News Corp for Shine as high, particularly given reports the company made about $45 million in profit in 2009. In comparison, analysts in Britain have accused Murdoch of undervaluing BSkyB in his current takeover battle for the business.
The deal could also raise more questions about succession issues at News Corp.
The company says Elisabeth will report to senior News Corp executive Chase Carey in her new role, and not her brother James, who has been seen as Rupert’s likely successor in the executive chairman’s role.
Some pundits have suggested this will allow Elisabeth to continue to build her managerial skills without being in direct competition to her brother.
Elisabeth Murdoch said in a statement that the alliance with News Corporation would help Shine expand in an increasingly competitive sector.
“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.”
“I could not be happier or more proud that from such modest beginnings Shine will join such an extraordinary group of companies.”
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.
Comments