Elisabeth Murdoch to join board of News Corp after £415m buyout of Shine

Shine Television's founder will have similar status in her father's company to her brother James Murdoch when deal is complete

Elisabeth Murdoch will join the board of her father's News Corporation and avoid reporting directly to her brother James after News completes the £415m buyout of her Shine Television group.

The deal values the 42-year-old's controlling stake in Shine – maker of Outcasts and Merlin – at close to £200m, once the long-anticipated transaction completes around Easter.

Shine will report to Chase Carey, News Corp's US-based deputy chairman, after the purchase completes regulatory approval – even though the television producer is based in London.

That means Shine will remain outside the direct remit of James Murdoch, the London-based chief executive of News Corporation, Europe and Asia – putting the two siblings on a more equal footing at News Corporation.

Although James Murdoch – the subject of a profile in the New York Times at the weekend – is widely seen as the heir apparent to Rupert Murdoch, the Shine purchase markedly steps up Elisabeth's influence at the business.

She left BSkyB 11 years ago "with regret" after a series of disagreements with Sky's then management team, and went on to set up Shine, which she built through acquisitions funded by a mixture of debt and family money.

She will remain in charge at Shine, and has told colleagues the television producer will continue to be her "main interest". It is not clear what, if anything else, she will take on.

Elisabeth Murdoch currently sits as an observer on News Corporation's board, but her father said he expected her to join the board as a voting member.

That means Shine will no longer be a "qualifying independent" for the purposes of the public service broadcaster's output quotas, which could make it marginally harder for the company to win work from the BBC, ITV or Channel 4.

News Corp disclosed that it would pay £415m for Shine, which includes absorbing its debts. Following an acquisition spree, Shine had borrowed £55m according to the last set of accounts published in 2009.

These debts are understood to have reduced modestly since, but Shine was not releasing an exact number for its current debt load – suggesting that the equity will be valued at somewhere around £365m

Liz Murdoch owns 53% of Shine, so the buyout would value her holding at somewhere slightly over £190m. However, she is unlikely to be able to cash in that much from her father's company.

News Corp did not say if it was paying for Shine in cash or shares – and it is understood that the final structure of the buyout is not yet complete. Banking sources have indicated that the deal was likely to be a paper one.

Rupert Murdoch, chairman and chief executive officer of News Corporation commented: "Shine has an outstanding creative team that has built a significant independent production company in major markets in very few years, and I look forward to it becoming an important part of our varied and large content creation activities."

Elisabeth Murdoch, chair and CEO of Shine Group, said: "In a rapidly consolidating global TV industry, this alliance uniquely provides the conditions in which Shine Group can continue to lead and prosper ... Shine shares News Corporation's long-standing belief in creative excellence and ambitious expansion."

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Dan Sabbagh

The GuardianTramp

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