LONDON News Corporation is planning to sell a significant share in its NDS Group plc subsidiary to private equity group Permira. NDS Group is a supplier of software, conditional access systems and architectural blueprints for digital pay-TV systems around the world.
U.K based NDS supplies the encryption technology and smartcards that News Corp's pay television investments including Foxtel in Australia, BSkyB in Britain and Sky Italia use to ensure their programs can only be watched by paying subscribers.
The complex deal, in a transaction valued at approximately $3.6 billion, would cut News Corp's stake in NDS from about 72 percent to 49 percent, reflects a 20.7 percent premium to NDS's American Depositary Shares closing price of $49.70 on Nasdaq on Friday.
News Corp and Permira said the deal reflects a 27 percent premium after adjusting for NDS's cash balance of $696 million.
News Corp, part of Rupert Murdoch's media empire, owns 72 percent of the equity and 96 percent of the voting power in NDS through its ownership of 100 percent of NDS's outstanding series B shares.
The transaction would leave News Corp with a 49 percent stake. Permira will own 51 percent of NDS.
NDS said it has appointed a committee of directors who are not on News Corp's board to review the deal.