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The following is the press release
disseminated by The News Corporation
Limited on August 14, 2000.
Filed by Fox Entertainment Group, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Fox Entertainment Group, Inc.
Commission File No. I-14595
[LOGO] News Corporation
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For Immediate Release Contacts: Media - Andrew Butcher 212 852 7070
Investors - Reed Nolte 212 852 7092
News Corporation To Acquire Chris-Craft, BHC And UTV In Cash And Stock
Transaction
Chris-Craft's 10 Stations Add To Strength Of 23 Fox Owned-And-Operated Stations;
Increased Competitiveness And Savings Expected To Make Deal Accretive To
Earnings
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New York, NY, August 14, 2000 - In a deal that significantly strengthens its
highly profitable television station business, News Corporation today announced
that it and Fox Television Stations had agreed to acquire Chris-Craft
Industries, BHC Communications and United Television, which together own 10
television stations and other assets. News Corporation will pay $5.35 billion,
comprising a cash payment of $2.13 billion and approximately 73 million ADRs
representing 292 million News Corporation preferred shares (ASX: NCPDP; NYSE:
NWS.A).
The new stations will be operated under Fox Television Stations within News
Corporation's majority-owned subsidiary, Fox Entertainment Group (NYSE: FOX).
Fox Entertainment Group will issue 122.2 million of its shares to News
Corporation in return for the acquired assets, increasing News Corp.'s equity
interest in FEG from 82.76 percent to 85.25 percent.
The addition of the Chris-Craft stations will give News Corporation and Fox
Television Stations an unequalled presence in the largest US television markets,
with 13 stations in the top 10 markets and 20 stations in the top 20 markets,
subject to the divestiture of stations as necessary to comply with FCC ownership
restrictions. Chris-Craft's integration into the Fox Television Stations group
will create duopolies in New York, Los Angeles, Salt Lake City and Phoenix, in
addition to Fox's existing duopoly in Dallas. In Los Angeles, the nation's
second biggest TV market, Fox will own two television stations and two regional
sports networks.
With the cost savings and revenue gains that are expected to result from the
expanded competitive presence in major markets, the company expects the
transaction will be immediately accretive to News Corporation and Fox
Entertainment Group earnings.
News Corporation Chairman and Chief Executive Rupert Murdoch said the Chris-
Craft stations, located in major television markets throughout the United
States, perfectly complemented News Corporation's existing group of 23 owned-
and-operated stations.
"This transaction gives News Corporation and Fox Television Stations a scarce
commodity in a highly profitable industry. Fox will now have duopolies in three
of the largest television markets in the US: New York, Los Angeles and Dallas.
We are acquiring stations with tremendous upside potential, particularly given
Fox's strength in local news, entertainment programming, sports and sales," Mr.
Murdoch said. "This unique opportunity to increase ratings and revenues through
top-market duopolies should quickly deliver substantially increased profits for
News Corporation and Fox."
Mr. Murdoch continued: "This acquisition will also help Fox expand and improve
its services in local news, sports and entertainment programming in the
communities we serve."
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Herbert J. Siegel, Chairman and President of Chris-Craft, said: "This merger
delivers substantial value to all of the Chris-Craft, BHC and UTV shareholders
and gives them the opportunity to participate further in the growth of News
Corporation. Rupert Murdoch, a global visionary, has built News Corporation into
one of the world's pre-eminent media companies. We have the utmost confidence in
News Corporation and Fox Television management's ability to capitalize on our
combined assets. I am pleased, as I'm confident all of our shareholders will be,
to hold a significant investment in News Corp.'s dynamic future."
The stations to be acquired are in: New York (UPN-9), Los Angeles (UPN-13), San
Francisco (UPN-44), Minneapolis/St. Paul (UPN-9), Phoenix (UPN-45), Orlando
(UPN-65), Portland (UPN-12), Baltimore (UPN-24), Salt Lake City (ABC-4) and San
Antonio (NBC-4).
Fox Television's existing stations are in: New York (FOX-5), Los Angeles (FOX-
11), Chicago (FOX-32), Philadelphia (FOX-29), Boston (FOX-25), Dallas (FOX-4 and
KDFI-27), Washington, DC (FOX-5), Detroit (FOX-2) Atlanta (FOX-5), Houston (FOX-
26), Tampa (FOX-13), Cleveland (FOX-8) Phoenix (FOX-10), Denver (FOX-31), St.
Louis (FOX-2), Kansas City (FOX-4) Milwaukee (FOX-6), Salt Lake City (FOX-13),
Birmingham (FOX-6), Memphis (FOX-13), Greensboro (FOX-8) and Austin (FOX-7).
The transaction, which includes the acquisition of all of the shares of Chris-
Craft Industries, Inc. (NYSE: CCN), BHC Communications, Inc. (AMEX: BHC), and
United Television, Inc. (NASDAQ: UTVI), is expected to be completed this fiscal
year ending June 30, 2001. The transaction is subject to certain closing
conditions, including regulatory and shareholder approvals. Chris Craft, which
owns approximately 80 percent of the common stock and 97 percent of the voting
stock of BHC, has agreed to vote its shares in favor of the BHC merger. BHC,
which owns approximately 57 percent of the common and voting stock of UTV, has
agreed to vote its shares in favor of the UTV merger.
Each Chris Craft stockholder will receive a combination of $34 in cash and
1.1591 News Corporation preferred ADRs (each representing four preferred limited
voting ordinary shares). Each stockholder will be entitled to elect to receive
instead, subject to the limitation described below, either $85 in cash or 1.9318
preferred ADRs. If this transaction closes after August 13, 2001, the
Chris-Craft merger consideration will be increased by $1.00.
Each BHC stockholder will receive a combination of $66 in cash and 2.2278
preferred ADRs. Each stockholder will be entitled to elect to receive instead,
subject to the limitation below, either $165 in cash or 3.7131 preferred ADRs.
Each UTV stockholder will receive a combination of $60 in cash and 2.0253
preferred ADRs. Each stockholder will be entitled to elect to receive instead,
subject to the limitation below, either $150 in cash or 3.3755 preferred ADRs.
News Corporation preferred ADRs closed at $44.125 on Friday.
It is intended that the receipt of the preferred ADRs will be tax-free to the
Chris Craft, BHC and UTV stockholders. The elections in each merger are subject
to the limitation that 40 percent of the total consideration in such merger be
paid in cash and 60 percent in preferred ADRs.
If the mergers do not receive FCC approval or an IRS ruling enabling them to be
accomplished in a manner that would permit the receipt of the preferred ADRs to
be tax-free,
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the parties have agreed to modify the structure of the mergers. In this case,
each shareholder will receive, for each share held, $36 (or $37, if the
transaction closes after August 13, 2001) and 1.2273 preferred ADRs in the Chris
Craft merger, $69.30 and 2.3392 preferred ADRs in the BHC merger and $63 and
2.1266 preferred ADRs in the UTV merger. The receipt of the cash and preferred
ADRs will be taxable in the restructured transactions.
News Corporation (ASX: NCP, NCPDP; NYSE: NWS, NWS/A; LSE: NEWCP) had total
assets as of March 31, 2000 of approximately US$40 billion and total annual
revenues of approximately US$14 billion. News Corporation's diversified global
operations in the United States, Canada, continental Europe, the United Kingdom,
Australia, Latin America and the Pacific Basin include the production of motion
pictures and television programming; television, satellite and cable
broadcasting; the publication of newspapers, magazines and books; the production
and distribution of promotional and advertising products and services; the
development of digital broadcasting; the development of conditional access and
subscriber management systems, and the creation and distribution of popular on-
line programming.
Forward Looking Statements:
This release contains forward-looking statements within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These statements are based on management's current expectations or beliefs and
are subject to a number of factors and uncertainties that could cause actual
results to differ materially from those described in the forward-looking
statements. The forward-looking statements in this release address the following
subjects: expected date of closing the merger; future financial and operating
results; and benefits of the merger.
The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: the risk that
News Corporation's and Chris-Craft's, BHC's and UTV's businesses will not be
integrated successfully; costs related to the merger; failure of stockholders to
approve the merger; inability to obtain or meet conditions imposed for
governmental approvals for the merger; increased competition and its effects on
price, spending, third-party relationships and revenues; inability to establish
and maintain relationships with advertising and marketing providers; and risks
of new and changing regulation in the U.S. and internationally.
For a detailed discussion of these and other cautionary statements, please refer
to Chris-Craft's, BHC's and UTV's filings with the Securities and Exchange
Commission, especially in the "Forward-Looking Statements" section of the
Management's Discussion and Analysis section of Chris-Craft's Form 10-K for the
fiscal year ended December 31, 1999, and to News Corporation's and Fox
Entertainment Group's filings with the Securities and Exchange Commission.
Where You Can Find Additional Information:
Investors and security holders of Chris-Craft, BHC and UTV are advised to read
the joint proxy statement/prospectus regarding the proposed merger when it
becomes available because it will contain important information about the
transaction. The joint proxy statement/prospectus will be filed with the
Securities and Exchange Commission by Chris-Craft, BHC and UTV and by News
Corporation. Investors and security holders may obtain a free copy of the joint
proxy statement/prospectus when it is available and other documents
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filed by Chris-Craft, BHC and UTV with the Securities and Exchange Commission at
its Web site at http://www.sec.gov. The joint proxy statement/prospectus and
these other documents may also be obtained for free from Chris-Craft, BHC, UTV
or News Corporation.
Each of Chris-Craft, BHC and UTV and each of its executive officers and
directors may be deemed to be participants in the solicitation of proxies from
each of its stockholders with respect to the transactions contemplated by the
merger agreements. Information regarding such officers and directors is included
in each of its proxy statements for each of its 2000 Annual Meeting of
Stockholders filed with the Securities and Exchange Commission. These documents
are available free of charge at the Securities and Exchange Commission's Web
site at http://www.sec.gov and from each of the companies.
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