News Corp and Telstra (the co-owner of Foxtel with 35 per cent) have deliberated an IPO numerous times in the past five years, to pave an exit or partial exit for both shareholders and give the company better access to capital markets.
Foxtel was initially slated to list in 2016, before the float was delayed, as it undertook work to revamp the structurally challenged paid television company.
At the time, Goldman Sachs and Citi were in NewCorp’s tent, while Credit Suisse and UBS were working for Telstra. The plans would’ve seen News Corp hold a controlling 51 per cent sake, while Telstra would have sold down to about 20 per cent, leaving 30 per cent for new investors.
Restructure, ready to go again
Those plans fell over – and the listing talks took off again as recently as 2019, but once again they were shelved.
[Note they did have more success on the dealing front in the 2018 financial year, when they agreed to clean up the corporate structure. Both vended their 50 per cent Foxtel stakes into a new vehicle, while News also tipped in its 100 per cent share of Fox Sports to get to the overall 65/35 split].
Now it is understood to be thinking what its pitch could look like this time around. While Foxtel old boxtop business is a battle, it has invested heavily into streaming, launching offerings like KayoSports and Binge, as part of its push back against the likes of Netflix and Nine-owned Stan.
And with Kayo tipping over the 1 million subscriber mark earlier this year and Binge growing to 679,000 subscribers (as of March 31) in less than a year, there’s something sparkly to appeal to potential IPO investors.
Last year it was revealed that News Corp and Telstra had rejected a $US2 billion bid for Foxtel from US cable TV veteran Leo Hindery, who runs New York-based media private equity fund InterMedia Partners.
The offer for the debt-ridden company was made after News Corp wrote down the value of Foxtel by $1.4 billion to $1.3 billion in May last year.
In its third quarter earnings for the three months to March 31, Foxtel’s revenue dipped 4 per cent on the prior corresponding period, while its earnings before interest, tax, depreciation and amortisation jumped 13 per cent to $US77 million.
While nothing is set in stone, Foxtel is clearly hoping this is a case of third time lucky.