Rupert Murdoch has bought the remaining 36.4% stake in Star TV for approximately $299 million, assuming full ownership of the pan-Asian satcaster.

The deal values the company at $825 million – the same price as when Murdoch first bought in.

Hong Kong billionaire Li Kashing’s company Hutchinson Whampoa and his son Richard’s private firm Genza held on to an aggregate of 36.4% of Star TV (formerly known as Hutchvision) after Murdoch’s News Corp. purchased 63.6% of Star in July 1993 for $525 million in cash and shares.

News Corp. on July 17 announced Murdoch’s deal to acquire the rest of the company. News Corp. also will pay off Hutchinson and Genza’s loans to Star TV at their face value, bringing the total payment to $346 million.

Completion of the sale will take place July 26.

Hutchvision Hong Kong Ltd., the company licensed by the Hong Kong government to operate and uplink the Star TV service, remains in the control of Hutchinson and the Li family.

Hong Kong regulations stipulate that such broadcasting licenses must be majority-held by local companies. Star TV holds 48% of Hutchvision Hong Kong Ltd., with the remaining 52% controlled by the Li family.

The Hong Kong government has voiced no objections to Murdoch’s full ownership of Star.

Although News Corp. had management control of Star under the previous arrangement, Murdoch has invested heavily in operations in India, Taiwan and Indonesia, and wanted the “room to maneuver quickly,” according to a spokesman.

The spokesman refused to discuss the business terms of the deal, and said the final sale was not part of the original 1993 agreement. Local media analysts reckoned Murdoch had still paid too much money for Star, adding that Li Kashing had benefited greatly from his original investment. However, added one, “when you want overall control, it’s a different matter.”

Speculation is mounting that Murdoch will seek an Asian listing for Star in Hong Kong as soon as the company turns a profit – predicted by analysts to be within the next 18 months.

Last November, Murdoch said he expected Star to lose $20 million in 1995.

Star is set for further expansion in the third quarter of this year when AsiaSat 2, on which Star has TV exclusivity, lifts off from China with vastly increased capacity. Star has announced plans for up to 30 new channels on AsiaSat 2.

Want Entertainment News First? Sign up for Variety Alerts and Newsletters!
Post A Comment 0