News Corp eyes stake in Saudi firm Rotana Media

Rupert Murdoch's News Corp is reportedly in talks to make its first major investment in the Middle East by acquiring a 20 per cent stake in Prince Alwaleed bin Talal's Rotana media empire. The possible deal was reported in The Wall Street Journal, which is owned by News Corp, citing informed sources. It is not yet clear whether the deal will be for existing stock or new shares, but a formal bid valuing the stake is expected this month, according to the Journal. No mention was made of a price. The deal would significantly strengthen the ties between two of the world's greatest media moguls. Prince Alwaleed - who recently topped Arabian Business's list of richest Saudis with a fortune of US$16.3 billion (Dh59.87bn) despite losses this year due to the economic downturn - owns a 5.7 per cent stake in News Corp through his investment vehicle, Kingdom Holdings. He is also the largest shareholder in Citigroup, which is advising on the deal, according to Fox Business. Prince Alwaleed's Rotana Group is a major force in Middle East media, with holdings in print, television, radio, film, digital and most notably music, in which it holds the largest single catalogue of Arabic-language music in the world. News Corp is one of the world's largest media conglomerates, owning many of the world's biggest media brands such as BSkyB, The Sunday Times, The New York Post, Harper Collins, National Geographic Channels, Fox film and television holdings, and MySpace. According to Forbes, Mr Murdoch is the 132nd-richest person in the world with a net worth of more than US$4bn. It was through Fox International Channels that News Corp deepened its connection with Rotana. The company launched two channels, Fox Movies and Fox Series, on Rotana's television platform last year. Industry experts say this expansion, along with Rotana's merger with the Lebanese Broadcasting Corporation (LBC) in 2007, is evidence of Rotana's plans to take on its Saudi-owned rival, MBC, in the war for ratings. MBC continues to win the ratings, but according to one industry expert who asked not to be named because of his closeness to the players, it is Rotana's diversification that makes it a natural partner for the highly diversified News Corp, especially as media increasingly converges towards a single digital platform. "Rotana is a fantastic diversified media conglomerate, and for any international group looking to enter this promising market, which is still experiencing double-digit growth, it makes sense to look for a partner like this," the expert said. The deal represents a vote of confidence for the growth potential of Middle East media and an engine to speed up that growth, he said. A spokesman for News Corp declined to comment on the deal. Rotana did not respond to requests for comment. khagey@thenational.ae