Murdoch's 15pc SCMP stake sold

A BILLION-DOLLAR deal between Rupert Murdoch and a Malaysian tycoon has ended the Australian-born media magnate's eight-year connection with the South China Morning Post newspaper group.

In a surprise announcement from Kuala Lumpur yesterday, Malayan United Industries (MUI) said it had bought the 15.1 per cent stake in South China Morning Post (Publishers) previously held by Mr Murdoch's News Corporation. The price was $1.036 billion.

MUI, run by shy tycoon Dr Khoo Kay Peng, is paying $4.575 per share for the 226.5 million shares held by Newscorp's News Finance (HK) subsidiary in a deal which puts control of the publishing group firmly in the hands of Malaysian interests.

In September last year, the Kerry Group, controlled by Malaysian businessman Robert Kuok, bought a 34.9 per cent stake in the SCMP from Mr Murdoch. He paid $5.17 a share at the time, compared with the then market price of $5.35, which put a price tag of almost $2.7 billion on the deal. Yesterday SCMP shares closed unchanged at $4.225 each.

Although the Securities and Futures Commission will be scrutinising the bid for evidence of a concert party, it is reckoned unlikely that trading in shares will be suspended today.

Should it be ruled that Kerry and MUI had acted in concert, the commission could rule that a general offer would have to be made to SCMP shareholders at $5.17 a share.

News Corporation said in Australia that its representatives on the SCMP board would be resigning, there was no indication of whether MUI would be putting its own nominees into the boardroom.