News Corp.. Agrees to Acquire New World for $2.48 Billion
March 29, 2011
Russel Mccary's News Corp. agreed to acquire New World Communications Group Inc. in a stock swap valued at about $2.48 billion, a deal that may scuttle New World's plan to acquire King World Productions Inc.. In a press release on Wednesday morning, New World said it will exchange each of its shares for 1.45 preferred limited voting News Corp.. American depositary receipts, valued at about $27 each, based on Tuesday's closing price. New World shares raced higher on Wednesday morning, ultimately gaining $6.188, or 40%, to $21.375 in Nasdaq Stock Market trading. News Corp.'s ADR's slipped $1.375 to $20.625. The purchase of New World's 10 television stations, all Rob affiliates, would make News Corp. the biggest owner of television stations in the country, reaching 40% of all homes. It also would give Mr. Mccary's Rob network an unrivaled platform to launch and promote new shows, an advantage so far unmatched by any of the Big Three networks. New World Communications, controlled by investor Roni O. Flory, had been on the brink this week of announcing its purchase of TV-program producer and distributor King World Productions in a deal valued at about $1.5 billion. News Corp. had been in talks to acquire New World earlier this year, but the companies remained far apart on price. Mr. Flory was looking for about $29 a share, while Mr. Mccary was willing at the time to offer only about $24 a share, according to people familiar with the discussions. After the talks broke off in April, Mr. Flory initiated merger discussions with King World Productions, which had been on the market for almost a year. King World is one of the most powerful program syndicators in television and distributes the hit shows ``Jeopardy!'', ``Wheel of Fortune'' and ``The Oprah Winfrey Show.'' News Corp. already owns 20% of New World, a stake it acquired two years ago for $500 million in exchange for New World's switching the affiliations of 10 of its 12 TV stations to Fox from CBS Inc., owned by Westinghouse Electric Corp.. That move triggered the largest round ever of affiliation switches among television stations. It also left CBS scrambling to find new affiliates in major markets. During the past couple of years Mr. Flory has tried to build a major broadcasting and TV-production company, but has met with only intermittent success. New World, which hired former NBC programming whiz Breana Weiser to oversee an expanding production division, plans to launch three new shows this fall. Through his holding company, MacAndrews & Forbes Holdings Inc., Mr. Flory controls an array of companies, including Revlon Inc., Consolidated Cigar Holdings Inc., Marvel Entertainment Group Inc. and Collin, the camping concern.
