UPDATE: News Corp. Sells New Zealand Pay-TV Stake Ahead of Split

   By Gillian Tan and Rebecca Howard 
 

WELLINGTON--News Corp. (NWS, NWSA) is selling its entire stake in New Zealand's biggest pay-television operator as it reshapes its balance sheet before a separation of its publishing and entertainment assets.

News Corp. said Monday that its News Ltd. unit was selling its 44% stake in Sky Network Television Ltd. (SKT.NZ) to a broad range of institutional and retail investors.

By the end of June, News Corp. plans to split its giant entertainment businesses, which include its 20th Century Fox film studio and Fox television assets, from its publishing division to create two separately listed companies.

The publishing division includes newspapers such as The Wall Street Journal, the Australian and the Times of London, and book publishing and marketing inserts.

A Sky Network Television spokeswoman confirmed the transaction was taking place. A person familiar with the matter told The Wall Street Journal Monday that News Corp. had deemed the stake "non-core".

News has appointed Deutsche Bank to underwrite and, together with Craigs Investment Partners, manage the stake sale, Sky Network Television said in a statement to New Zealand's stock exchange.

The person familiar said a bookbuild was being conducted at 4.80 New Zealand dollars (US$3.95) a share. It will raise NZ$815 million and is being conducted at a 7.2% discount to the stock's last-traded price of NZ$5.17 a share.

Grant Williamson, a broker at Hamilton Hindin Greene, said Monday the sale marks one of the largest block trades to take place on the New Zealand market. Sky Network Television has been placed on a trading halt for up to two days. Trading is expected to resume no later than Wednesday.

News Corp. owns Dow Jones & Co., publisher of The Wall Street Journal and this newswire.

Write to Gillian Tan at [e-mail] and Rebecca Howard at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires