News Out of Home BV, a subsidiary of News Corp. (NYSE: NWS; ASX: NCP), controlled by Rupert Murdoch, has acquired 67% of Maximedia Outdoor Advertising Ltd. from Polar Investments Ltd. (TASE:PLR) for $4 million. New Corp has an option to buy Polar’s remaining 33% stake in Maximedia for $1.5 million within two years of closing the deal.
If the sale is closed and obtains approval of the Antitrust Authority, Polar will probably post a NIS 20 million pretax capital gain on the sale.
Maximedia CEO Roni Harel expressed great satisfaction with the sale, saying that News Corp paid a good price for the company, proving its confidence in the Israeli market. “If they weren’t convinced that the future of this market was rosy, they wouldn’t have entered it. In contrast to Polar, News Corp is a strategic investor with a long-term perspective. It’s a strong group, both financially and professionally, which will greatly contribute to Maximedia’s professional abilities.”
Harel is not panicked by the battered condition of Israel’s billboard market in recent years. “I believe that we’ll succeed with the right combination of products and services,” he said.
Polar’s sale ends a volatile year for Maximedia, beginning with personnel changes, and continued with marketing and ownership changes, before ending with the current sale. Until a few months ago, Polar and Aurec owned Maximedia in equal shares, before Polar bought Aurec out. Maximedia controls 40% of Israel’s billboard market, and owns half of Heidia Ltd., which specializes in advertising at sales points. Heidia is the Israeli representative of News Corp subsidiary News America Marketing.
Published by Globes [online], Israel business news - www.globes.co.il - on November 13, 2005