News Corp. pacts with China giant
News Corp. is creating a strategic alliance with China Mobile through the sale of a 19.9% stake in Phoenix Satellite TV, mainland China’s leading private sector broadcaster.
China Mobile is the world’s largest mobile company in terms of subscriber numbers, with 265 million users.
Pact was announced Thursday after the closure of the Hong Kong stock market. Trading in shares of the satcaster was suspended all day ahead of a statement. Value of the transaction was not disclosed, but sources suggest a pricetag exceeding $130 million.
The sale sees News Corp.’s stake, held through its Hong Kong offshoot Star TV, shrink from 37.5% to 17.6%.
Rumors of a News Corp. pullout from Phoenix first emerged in February, when it was reported that Rupert Murdoch felt Phoenix had not done enough to further other News Corp. interests in China.
Phoenix, which has five channels, operates nationally, while Star TV, with 50 services in nine languages, remains restricted to broadcasting in Guangdong province and certain hotels and apartments frequented by foreigners.
In September last year Murdoch said News Corp. had “hit a brick wall in China.” However, Phoenix and Star were at pains to downplay suggestions of a reverse and hinted that News Corp. has no plans to further cut its stake.
“We look forward to our continued involvement in Phoenix as the company extends its content to the largest wireless customer base in the world,” Star TV CEO Michelle Guthrie said.
China Mobile is pushing convergence and building access to content ahead of an anticipated 3G license award later this year.