Twenty-First Century Fox 2008 Annual Report Download - page 57

NEWSCORP
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
outstanding share of Dow Jones common stock was converted into the right to receive, at the election of the holder, either (x) $60.00 in cash or
(y) 2.8681 Class B common units of Ruby Newco. Each Class B common unit of Ruby Newco is convertible into a share of News Corporation Class A
Common Stock. The consideration for the acquisition was approximately $5,700 million which consisted of: $5,150 million in cash, assumed net
debt of approximately $330 million and approximately $200 million in equity instruments. The results of Dow Jones have been included in the
Company’s consolidated statements of operations from December 13, 2007, the date of acquisition.
In November 2007, Dow Jones announced that it would explore strategic alternatives for the Ottaway Community Newspapers (the “Ottaway
Newspapers”), which the Company acquired as part of the Dow Jones transaction. In June 2008, the Company determined that it would not sell the
Ottaway Newspapers.
In February 2008, the Company closed the transactions contemplated by the share exchange agreement (the “Share Exchange Agreement”)
with Liberty Media Corporation (“Liberty”). Pursuant to the terms of the Share Exchange Agreement, Liberty exchanged its entire interest in the
Company’s common stock (approximately 325 million shares of Class A Common Stock and 188 million shares of Class B Common Stock) for 100%
of the stock of a wholly owned subsidiary whose holdings consisted of the Company’s approximate 41% interest (approximately 470 million
shares) in The DIRECTV Group, Inc. (“DIRECTV”) constituting the Company’s entire interest in DIRECTV, three of the Company’s Regional Sports
Networks (FSN Northwest, FSN Pittsburgh and FSN Rocky Mountain) (the “Three RSNs”) and approximately $625 million in cash (the
“Exchange”). The Exchange resulted in the divestiture of the Company’s entire interest in DIRECTV and the Three RSNs to Liberty. A tax-free gain
of $1.7 billion on the Exchange was recognized in Other, net in the consolidated statements of operations for the fiscal year ended June 30, 2008.
Upon the closing of the Exchange, the Company entered into a non-competition agreement with DIRECTV and non-competition agreements with
each of the Three RSNs, in each case, restricting its right to compete for a period of four years with DIRECTV and the Three RSNs in the respective
regions in which such entities were operating on the closing date of the Share Exchange Agreement.
In May 2008, the Company disposed of its entire interest (approximately 41%) in Gemstar-TV Guide International Inc.’s (“Gemstar”) common
stock in exchange for a cash payment of approximately $637 million and approximately 19 million shares of Macrovision Solutions Corporation
(“Macrovision”) common stock. The Company sold all of its shares of Macrovision common stock in June 2008. The Company recorded a net gain of
approximately $112 million on the disposals which is included in Other, net in the consolidated statements of operations.
During fiscal 2008, the Company, through a series of transactions, acquired a 25% ownership interest in Premiere AG for cash consideration of
approximately $666 million.
In June 2008, the Company announced that it and two newly incorporated companies formed by funds advised by Permira Advisers LLP (“the
Permira Newcos”) proposed a transaction to an independent committee of the NDS board of directors, which would result in NDS ceasing to be a
public company, and the Permira Newcos and the Company owning 51% and 49% of NDS’ outstanding equity, respectively. On August 5, 2008,
NDS announced that the independent committee reached an agreement in principle with the Company and the Permira Newcos on a price at which
they would acquire all the issued and outstanding NDS Series A ordinary shares, including those represented by American Depositary Shares traded
on The NASDAQ Stock Exchange, for per share consideration of $63 in cash. As part of this transaction, approximately 68% of the NDS Series B
ordinary shares held by News Corporation would be cancelled in exchange for $63 per share in a mix of approximately $1.5 billion in cash and a $242
million note. The transaction is subject to negotiation and execution of final legal documentation, and is also conditioned upon approval by the
holders of NDS’ Series A ordinary shares, court approval, the receipt of certain regulatory approvals and other customary closing conditions. There
can be no assurance that the parties will enter into final legal documentation or that any transaction will be consummated.
In July 2008, the Company completed the sale of eight of the Company’s owned and operated FOX affiliate television stations to an indirect,
wholly owned subsidiary of Oak Hill Capital Partners III, L.P. for approximately $1.1 billion in cash. The stations included: WJW in Cleveland, OH;
KDVR in Denver, CO; KTVI in St. Louis, MO; WDAF in Kansas City, MO; WITI in Milwaukee, WI; KSTU in Salt Lake City, UT; WBRC in Birmingham,
AL; and WGHP in Greensboro, NC.
56 NEWSCORP 2008 Annual Report