News Corp Possible Buyer for Shine - Analyst Blog

According to Bloomberg, Rupert Murdoch's News Corp. (NWSA) may turn out to be a possible buyer for the Shine group, founded by his daughter, Elisabeth Murdoch, in 2001.

The news followed after Shine engaged JPMorgan (JPM) to advice about the strategic alternatives and expansion opportunities of the company in the coming years.

The probable buyout of Shine Group would take Ms. Murdoch back into her father's media territory, and is likely to place her as a promising heir to the 79 year old, Rupert Murdoch. Prior to it, Elisabeth refused to be a board member in her father's company as it would have clashed with her ownership of Shine.

The possible acquisition will bring in certain drawbacks for Shine. The company would lose its sovereign standing and in turn would lose the chance of offering ideas to BBC and other media houses, which by regulations are required to give external producers an opportunity to participate with native studios.

The production company of Elisabeth creates many well-liked television shows and drives production groups in numerous countries. Elisabeth Murdoch possess more than 50% stake in Shine, with Sony Corporation (SNE) holding around 20%, British Sky Broadcasting around 13%, while the remaining percentage is owned by management.

In a separate story, JPMorgan is advising News Corp. for its proposed buyout of the remaining 61% stake in U.K.based pay TV operator, British Sky Broadcasting. The company currently holds a 39% interest in British Sky and is waiting for the regulatory sanction on its bid to takeover British Sky.

Currently, we have a Neutral rating on the stock. Moreover, News Corp. holds a Zacks #3 Rank, which translates into a short-term Hold rating, and correlates with our long-term recommendation.

 
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