News Corp. (NWS) and the investment firm Permira Advisors announced late Friday that they have proposed taking cable television technology company NDS Group (NNDS) private. On completion of the deal, NDS Group would be owned 51% by Pemira and 49% by News Corp.

Under the proposal, holders of NDS Series A ordinary shares and American Depositary Shares would receive $60 a share. About 68% of the Series B shares held by News Corp. would also be redeemed at $60 a share, but in this case paid for with a mix of $1.5 billion in cash and a $200 million vendor note. News Corp. currently holders a 72% stake and 96% voting control of NDS through ownership of 100% of the Series B shares. News Corp. will maintain its 32% stake in the Series B shares.

News Corp. asserted in its announcement that “the proposed transaction represents an attractive alternative for shareholders: it provides an excellent opportunity for public shareholders to exit an illiquid investment at an attractive price in a very challenged financing and economic market environment.” The company also notes that A shareholders will get the same price as the B holders despite a difference in voting rights.

News Corp. says the transaction would be funded by a mix of newly incurred NDS senior and mezzanine indebtedness, an investment provided by Permira and cash on hand at NDS. Barring any delays, the deal would be effective in Q4.

The proposed deal will be considered by an an independent committee of NDS directors.

Disclosure: News Corp. also owns Barron’s, publisher of this blog.

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Eric Savitz

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