News Corp has pumped an additional US$35 million into the Saudi Arabian media company Rotana, as Rupert Murdoch¿s troubled empire continues to build its presence in the Middle East.
News Corp lifts stake in Rotana to almost 19%
News Corp has pumped an additional US$35 million (Dh128.5m) into the Saudi Arabian media company Rotana, as Rupert Murdoch's troubled empire continues to build its presence in the Middle East.
Rotana, which is controlled by the billionaire Prince Al Waleed bin Talal, is the world's largest producer of Arabic music, and runs several TV and radio stations.
News Corp quietly acknowledged it has increased its stake in Rotana to almost 19 per cent, amid the continuing scandal in the United Kingdom in which a number of the company's journalists and executives have been implicated in illegal phone hacking.
"News Corporation exercised the remaining half of its option to increase its stake in Rotana Group to 18.97 per cent from 14.53 per cent by purchasing newly issued shares in Rotana for $35m," a spokeswoman for News Corp told The National.
News Corp bought a 9.09 per cent share in Rotana for $70m in early 2010, in a deal that came with the option to double the stake.
It exercised 50 per cent of that purchase option last May, and has just taken out the remainder. In total, News Corp has spent $140m in acquiring almost 19 per cent of Rotana.
Analysts said the move confirms News Corp's intention to expand its operations in the Middle East. "It's a confirmation from News Corp of their strategy towards the Middle East," said Santino Saguto, a partner at Deloitte Middle East. "News Corp is increasing its presence in the region … It's a good thing for both News Corp and Rotana."
Mr Saguto said the move would give News Corp a greater say in possible tie-ups with its other businesses.
"Rotana is a company with important assets in the region, in terms of music and video," he said. "The additional share allows [News Corp] to have even more influence in the company, in terms of management and synergies with the other international operations."
Mr Murdoch has been slowly building his empire in the Middle East. An Arabic-language version of Sky News, which is part-owned by News Corp, launched this month.
Fox International Channels, a unit of News Corp, broadcasts several channels in the Middle East and North Africa. News Corp's Dow Jones, Harper Collins, Star TV and National Geographic brands also have a presence in the region.
News Corp also holds a minority stake in the Dubai-based media company Moby Group, which runs several media brands in Afghanistan.
Rotana's Prince Al Waleed, has also been increasingly active in the media industry.
Last year, he invested $300m in the microblogging site Twitter, and he plans to launch an Arabic-language news station early next year. He also owns a 7 per cent stake in News Corp.