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News Corp. completes acquisition of Elisabeth Murdoch's Shine Group [updated]

April 5, 2011 |  9:32 am

Rupert Murdoch's News Corp. said Tuesday it had completed its $674 million purchase of Shine Group, the London-based TV production company owned by the mogul's daughter, Elisabeth Murdoch. 

The transaction accomplishes Murdoch's goal of returning his daughter, Elisabeth Murdoch, to the corporate fold a week after her brother James Murdoch was elevated to deputy chief operating officer of News Corp. James Murdoch is expected to move to New York this summer to begin learning the U.S. operations of the sprawling media empire. Elisabeth Murdoch

Elisabeth Murdoch, 42, plans to remain in London. She will continue to oversee Shine, which has grown into a leading producer of reality shows that include "MasterChef," "The Biggest Loser" and "One Born Every Minute." 

The Shine purchase, announced in February, prompted a lawsuit by a New York state bank representing shareholders. The bank contends the $674 million purchase price was exceedingly high, and that News Corp. shareholders were overpaying to enrich a Murdoch family member. 

"Murdoch historically has operated News Corp. as his own private fiefdom with little or no effective oversight from the board," Amalgamated Bank's complaint said.

In its announcement Tuesday, News Corp. said the stock transaction had been approved by its audit committee, which is "composed entirely of independent directors." The committee, News Corp. said, "received advice and a fairness opinion" from an outside investment bank, Centerview Partners, and legal advice from the Wachtell, Lipton, Rosen & Katz law firm.

News Corp. said the various Shine shareholders -- including Elisabeth Murdoch -- received a total of about $472 million in "aggregate proceeds."  That was the "take away" amount left after retiring Shine's debt and paying other liabilities, a company official said.

Elisabeth Murdoch owned 53% of Shine. Sony Pictures Entertainment owned 20% and British Sky Broadcasting, which News Corp. is in the process of buying, owned 13%.  A smattering of other minority shareholders held the rest.

Updated 10:08 a.m.: Elisabeth Murdoch is expected to receive a seat on the News Corp. board, where she would join her two brothers, Lachlan and James, who are already directors. Including Rupert Murdoch, that would bring to four the number of Murdochs on the board of News Corp.

[An earlier version of this post said Elisabeth Murdoch had received a seat on the board. She has not yet been elected but has been serving as a board observer.] 

-- Meg James and Dawn C. Chmielewski

Photo of Elisabeth Murdoch, daughter of media mogul Rupert Murdoch. Credit:  Matthews  Allstar