News Corp. and Permira announced the deal Friday evening, after stock trading had closed in New York. The transaction will leave News Corp. holding a 49% stake in NDS, while Permira will assume majority ownership, with a 51% stake.
NDS is based in the U.K. and provides technology and services to digital pay-television operators and content providers.
Holders of NDS' Series A ordinary shares will receive $60 in cash, a 21% premium to the $49.70 level where the American depositary shares closed Friday in New York. The shares are down more than 20% from their 52-week high of $63.57.
News Corp. currently owns almost three-quarters of the equity and almost all of the voting power in NDS, because it owns all of the affiliate's Series B shares. But it will reduce its stake in NDS by selling about 68% of the Series B shares to Permira for $60 a share. Permira will pay a mix of $1.5 billion in cash and a $200 million vendor note.
"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," said a press release from News Corp. and Permira announcing the deal.
News Corp. shares lost 45 cents, or 2.8%, to close at $15.73 Friday.
This article was written by a staff member of TheStreet.com.