News Corp.’s sat IPO is ready for launch

Company hopes to raise $5 bil with Platco offering

NEW YORK — Seagram and Vivendi have hogged center stage lately, but News Corp. is also on the move, forging ahead with plans to collect its vast worldwide satellite assets under one roof and sell a piece of it to forward-looking investors.

Affirming the importance of distribution, the new company, provisionally called Platco, reps News Corp.’s vision of an interactive future in which digital set-top boxes in subscribers’ homes serve as a gateway to the Internet.

News Corp. sources said the company expects to file documents with the Securities and Exchange Commission this week for an initial public stock offering of Platco, which will bundle News Corp.’s crown jewels — its stake in London-based satcaster BSkyB and its Star TV in Asia — with other satellite and digital services throughout Europe and Latin America.

A U.S. component is lacking. But the offering will give Platco currency for acquisitions, and many expect it to make a run for satcasters DirecTV or EchoStar.

Vivendi owns a big stake in BSkyB as well, and chairman Jean-Marie Messier has expressed interest in swapping that for a piece of Platco. That’s still to be decided, as are the other companies that will come on board as Platco investors.

News Corp. hopes to raise about $5 billion from the IPO, and Wall Streeters have put a lofty $40 billion valuation on the new company, whose parent’s market capitalization is less than $30 billion. News Corp. stock got a 5% bump Friday as the market cheered news of Platco’s imminent arrival.

Platco, in essence, represents the assets that set News Corp. apart from its U.S. media rivals, who may be steeped in broadcasting or cable, but by and large have shied away from satellite — and certainly from the sweeping international scale that marks News Corp.’s DBS business. Legal restrictions on dual ownership of cable and satellite have kept some giants like cable operator Time Warner out of the game.

The satellite assets are also the ones that have confused and irritated U.S. media and entertainment investors who had little inclination to focus on what they considered far-flung and obscure businesses that were nevertheless a big part of News Corp.’s cash flow and strategy. That’s why News Corp. spun off its U.S. film and TV businesses into a separate publicly traded company, Fox Entertainment Group, in 1998.

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