News Corporation, two newly incorporated subsidiaries of funds advised by Permira Advisers LLP (the “Permira Newcos”) and NDS Group plc have announced that they have signed an agreement pursuant to which News Corporation and the Permira Newcos would acquire all issued and outstanding NDS Series A ordinary shares, including those represented by American Depositary Shares traded on NASDAQ, for the previously announced per share consideration of $63 in cash.
The consummation of the transaction would result in NDS ceasing to be a public company, and the Permira Newcos and News Corporation owning approximately 51% and 49% of NDS, respectively. Approximately 67% of the NDS Series B ordinary shares held by News Corporation would be cancelled in exchange for $63 per share in a mix of cash of approximately $1.52 billion and a $242 million vendor note. The transaction is expected to close by the end of the year or early 2009.
The independent committee of the board of directors of NDS has approved the agreement and will recommend to the holders of the NDS Series A ordinary shares that they vote in favor of the scheme of arrangement implementing the transaction. The independent committee has received an opinion from Citi that the per share consideration of $63 in cash is fair, from a financial point of view, to holders of the NDS Series A ordinary shares, including those in the form of American Depositary Shares.
“With the convergence of broadband and broadcast technology, new frontiers lie ahead for NDS. NDS needs to have the strategic agility and flexibility to enter into any type of value enhancing transactions. The current ownership structure was imposing certain limitations. Therefore News Corporation has decided to reduce its ownership position in NDS so that NDS can capitalize on these new opportunities with a more independent structure and the expertise of Permira ,” Abe Peled, Chairman and CEO of NDS said.
The consummation of the transaction contemplated by the agreement is conditioned upon, among other conditions, the receipt of certain regulatory approvals, the approval of the transaction by holders of the NDS Series A ordinary shares, the approval of the High Court of Justice of England and Wales, the availability of a requisite amount of funds at NDS and certain other customary conditions. There can be no assurance that the transaction will be consummated.
NDS has published an announcement of the agreement in the United Kingdom which will be filed on Form 8-K with the SEC. NDS will file a proxy statement in connection with the proposed transaction. The proxy statement will be mailed to the holders of NDS Series A ordinary shares in the United States.
The signing of the agreement follows NDS’s announcement on August 5, 2008 that the independent committee of its board of directors had reached an agreement in principle with News Corporation and the Permira Newcos on a price of $63 per share.
The independent committee of the board of directors of NDS is advised by Citigroup Global Markets Limited and Weil, Gotshal & Manges LLP. News Corporation is advised by J.P. Morgan Securities Inc., Skadden, Arps, Slate, Meagher & Flom LLP and Hogan & Hartson LLP. The Permira Newcos and Permira Advisers LLP are advised by Goldman Sachs International and Clifford Chance LLP. NDS is advised by Morgan Stanley & Co Limited and Allen & Overy LLP.