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Is Foxtel Set To Be Floated As Kayo Subs Surge

They have racked up over a million subscribers for Kayo and demand for their live sports coverage is soaring, now speculation has emerged that the News Corp Telstra owned Foxtel is set to floated.

The move comes as the market moves to streaming and a new generation of consumers spend up big on content over free to air TV.

Increased viewing of live NRL and AFL games is driving Foxtel Sport while Kayo has hit the 1 million subscriber mark and Binge 679,000 subscribers (as of March 31) in less than a year.

According to the Australian Financial Review News Corp and Telstra have invested in a feasibility study to assess the viability of a berth on the ASX boards later this year.

The company, which is 65 per cent owned by News Corp is a key player in the Australian streaming market with Citi and Bank of America tipped to get the nod should a float go ahead.

Another option is for the business to be sold outright to an overseas investor who currently owns content assets and is looking to expand their global asset base.

Last year it was revealed that News Corp and Telstra had rejected a $US2 billion bid for Foxtel from US cable TV veteran Leo Hindery, who runs New York-based media private equity fund InterMedia Partners.

Sources have told the AFR that an IPO was not imminent – rather the shareholders were actively assessing whether Foxtel’s relatively new streaming arms were a strong enough lure to tempt new investors and make the long-mooted float a reality.

News Corp and Telstra who only have a 35% shareholding have considered an IPO in the past but have walked away from a float that would spread the risk at Foxtel that has cut costs while rationalising their content spend.

Currently Foxtel is renegotiating the rights to Formula One with Amazon Prime looking at a deal to pick up the global broadcast rights a new competitor.

Speculation has it that Amazon {Prime has held talks with SBS to get the co rights to the next soccer world cup.

Foxtel was initially slated to list in 2016 at the time, Goldman Sachs and Citi were in News Corp’s tent, while Credit Suisse and UBS were working for Telstra.

The plans would’ve seen News Corp hold a controlling 51 per cent’s sake, while Telstra would have sold down to about 20 per cent, leaving 30 per cent for new investors claims the AFR.

Those plans fell over – and the listing talks took off again as recently as 2019, but once again they were shelved.

The owners recently wrote down the value of Foxtel by $1.4 billion to $1.3 billion in May last year.

While nothing is set in stone, Foxtel is clearly hoping this is a case of third time lucky the AFR concluded.

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