Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Murdoch's Fox Corp to buy fintech Credible Labs in $397 million deal

Published 05/08/2019, 06:46
Updated 05/08/2019, 12:54
Murdoch's Fox Corp to buy fintech Credible Labs in $397 million deal

Murdoch's Fox Corp to buy fintech Credible Labs in $397 million deal

By Paulina Duran

SYDNEY (Reuters) - U.S. broadcaster Fox Corp on Monday agreed to buy Credible Labs Inc in a deal valuing the online finance broker at $397 million (£326 million), as the Murdoch-controlled firm hunts for growth following the sale of its film and TV assets to Disney .

In a challenging media landscape, the San-Francisco-based Credible Labs, listed on the Australian Stock Exchange, gives Fox exposure to an online service that matches personal borrowers and lenders seeking to service the $1.6 trillion a year U.S. mortgage market.

"The acquisition of Credible underscores Fox Corporation's innovative digital strategy that emphasizes direct interactions with our consumers," Lachlan Murdoch, Fox Corp's executive chairman and chief executive, said in a statement.

Credible's online platform provides credit checks to borrowers seeking mortgages and student and personal loans, and uses that information to show them pre-qualified loan rates and refinancing options that they can click through to obtain.

The fintech company had synergies with FOX Business and FOX Television businesses and would join its FOX Sports app, live and on demand content and FOX Now, Fox said, which would help both companies to grow.

Rupert Murdoch's newly spun-off media company Fox Corp debuted on the Nasdaq in March following the $71 billion sale of Twenty-First Century Fox Inc's film and television assets to Walt Disney (NYSE:DIS) Co.

The smaller firm now relies on costly live cable sports and news in an increasingly competitive television industry.

PREMATURE SALE

Credible said its shareholders will receive A$2.21 in cash per CHESS depository interest (CDI), valuing it at A$585 million less than two years after it listed in Australia at just over half that value.

Fox's offer price represents a 7% premium to its last close of A$2.06 on August 2.

Majority shareholder, founder and Chief Executive Stephen Dash would remain head of the new Fox subsidiary and would exchange shares equal to one-third of Credible's outstanding common stock into units of a newly created Fox subsidiary.

The transaction is subject to shareholder approval. Credible's board of directors - who own a combined 13% of shares in the company - unanimously backed the proposal.

Some minority shareholders were surprised by the approach and feared missing out on the potential growth of the company if they sell now, said Bell Potter analyst Damien Williamson, who values Credible at A$2.78 per share.

"Premature is the word to describe how some minority shareholders see the transaction," said Williamson. "This company is operating in a very large market and has the potential to do really well."

Williamson said there was potential for Credible's larger American rivals, such as Lendingtree Inc, to launch competing bids for the company.

Shares in Credible rose 6.3% percent to A$2.19 in a broader market that was down 1.8%.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.