Forum Archive Index - April 2000

["simon dallimore" <smndallimore@hotmail.com>]

Much has been written about INL on Sharechat and this news item (reproduced 
below) from this morning's Melbourne Age only vindicates the value of having 
a media/entertainment/web portal stock such as INL in one's portfolio.
For the uninitiated, News Corp owns half of INL which is due to release news 
about its super-duper web portal in early May.

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'Dream beam' finally arrives for News
By JANE SCHULZE
Tuesday 11 April 2000

Merrill Lynch, the broking firm traditionally the most bullish on Rupert 
Murdoch's News Corporation, has described the satellite business that the 
company is preparing to float as the "dream beam" and lifted its valuation 
for the company to $US39 billion ($A65 million).

Merrill Lynch's media analyst, Jessica Reif-Cohen, says it is difficult to 
value the company given the lack of information on its future partners and 
their ownership levels.

But in a note to clients she said that the $US39 billion value for the
company, termed Platform Co, revised from an earlier value of $US36 billion, 
could be "materially low".

"Noting the proven value potential the public market ascribes on a
per-subscriber basis for integrated media platforms, such as BSkyB, we
firmly believe our value could be materially low," she said.

Her comments ignited the company's shares, with the ordinaries lifting
$1.15 to close yesterday at $24.10 and the preferred shares gaining 84 cents 
to close at $20.30.

News' president and chief operating officer, Peter Chernin, said last week 
that details of the listing and of News' partners in the business would not 
be revealed for about three months.

Ms Reif-Cohen justified the dream beam description by saying the combination 
of News' satellite businesses would put it in the
"unparalleled" position of being the only company able to provide a video 
and data infrastructure to the bulk of the world.

"The dream beam will allow News Corp to shift the capital expenditures
for its satellite and related businesses to the new company, thus providing 
News with greater cashflow for its own share repurchase," she said.

"The separate dream beam trading stock also creates an appropriate currency 
for acquisitions."

Ms Reif-Cohen said it would be a "defining" transaction for News Corp
as it would also solidify News' status as a "global gatekeeper".

"The central theme lies in News Corp's ability to deliver an expanded 
portfolio of two-way communications services, primarily video and
Internet, through its satellite platform to fixed devices in the home," she 
said.

And she said there were plans to upgrade the satellite infrastructure to 
provide data to wireless devices.

This meant News would be in a position to have "a pick of the litter of 
potential strategic partners for the dream beam, spanning the entire digital 
new-media spectrum".

News is speaking to companies such as Microsoft and Yahoo! about
taking strategic equity in the venture.


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