Global private equity investor Permira and Rupert Murdoch-helmed entertainment group News Corporation have proposed a take-private of News Corporation’s majority-owned public subsidiary, NDS Group.
If the proposal is accepted by NDS, the newly private company would be 51 percent owned by Permira and 49 percent owned by News Corporation. The transaction is expected to close in the fourth quarter of 2008.
A News Corporation spokesman declined to comment on the proposal.
UK-headquartered NDS is a supplier of technology and services to pay-television platform operators and content providers. The company’s clients include DIRECTV, BSkyB and Sky Italia.
Holders of NDS’s NASDAQ-traded American depository shares would receive $60 (€38.3) per share in cash.
News Corporation currently holds 72 percent of the equity, 96 percent of the voting power and 100 percent of the outstanding series B shares of NDS. In exchange for its reduced ownership, News Corporation would be compensated at a price of $60 per share with $1.5 billion in cash and a $200 million vendor note.
Equity financing will be provided by Permira-advised funds and third party debt financing has been secured from JP Morgan and Morgan Stanley.
The transaction has been “fully negotiated” between Permira, News Corporation and NDS managment, according to a statement issued by Permira and News Corporation. Permira has concluded its due diligence.
The board of NDS has confirmed the receipt of the proposal and has formed an independent committee to consider the transaction, according to an NDS statement. The committee is advised by financial advisor Citigroup Global Markets and legal advisors Allen & Overy and Weil, Gotshal & Manges.
The proposed transaction provides “an excellent opportunity for public shareholders to exit an illiquid investment at an attractive price in a very challenged financing and economic market”, said Permira and News Corporation in a statement.
Permira has 11 offices worldwide and acts as advisor to the 19 Permira Funds which have approximately €22 billion ($34.5 billion) in total committed capital.