News Trims Back Fox IPO Plans

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News Corp. is moving ahead with its Fox Entertainment Group
stock offering, but on a smaller scale than expected.

Last week, News Corp. said in a filing the initial public
offering would be 85 million Class A shares, or 13.4 percent of equity in its U.S.-based
entertainment assets. In June, News Corp. said the IPO would be up to 20 percent of the
assets, which include Fox's film and television production units, the Fox
Broadcasting network and Fox cable holdings, such as Fox News Channel, 50 percent of
Fox/Liberty Networks and 49.5 percent of Fox Family Worldwide Inc.

Bowing to market conditions, News Corp. decided it had to
scale back what could have been a $2.5 billion offering to what analysts now think could
be a $1.5 billion stock sale.

"The reality is the market won't do much
more" than that amount, PaineWebber Inc. entertainment analyst Christopher Dixon
said.

That's if the IPO is able to proceed at all. Many
others have had to be shelved. Dixon said News Corp. had no pressing need to do the IPO,
other than to gain some financial flexibility. So it could shelve the offering if it feels
the market won't deliver the valuation the company expects. News Corp. chairman
Rupert Murdoch had said the unit should be worth $20 billion.

As expected, News Corp. will control the Fox Entertainment
unit even after the stock sale. News Corp., which would retain Class B shares and most
Class A shares, would have 98.5 percent voting control, according to the filing.

The filing said News Corp. would assign $4.5 billion in
debt to Fox Entertainment, which generated about $7 billion in revenue and $906 million in
cash flow during the year ended June 30. Those results were boosted by success of the film
Titanic.

But broadcast and entertainment stocks have been hit lately
by recession concerns, and News Corp. shares were down last week, as well.

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