News Corp buys $70m stake in Saudi group

By Lina Saigol in London and Andrew Edgecliffe-Johnson in New York

Published: February 22 2010 23:24 | Last updated: February 23 2010 12:26

Rotana Media, the broadcaster and music group owned by Saudi billionaire investor Prince Alwaleed bin Talal, said it had agreed to sell a $70m stake to News Corp, Rupert Murdoch's global media empire.

Rotana said on Tuesday that News Corp had agreed to buy a 9.09 per cent stake with an option to take this up to 18.18 per cent.

The move will mark News Corp's most significant investment so far in the Middle East, where faster GDP growth, a young population and maturing advertising markets have begun to draw US and European media groups facing slow growth in their home markets.

"This is a qualitative leap not just for Rotana but for the whole Arab world," Prince Alwaleed told a press conference. "We are set to gain deep experience from News Corp ... on television, movie production and technology," he said. "They own MySpace ... We can learn from this, the new media field."

The acquisition will also tie the Murdoch family closer to one of their most important shareholders.

Prince Alwaleed's Kingdom Holdings owns 7 per cent, or 56m shares, of News Corp's class B stock and is the largest shareholder outside the Murdoch family.

The prince is not on News Corp's board of directors, but last month anointed James Murdoch, head of News Corp's European and Asian operations, as his father's eventual successor.

"If he [Rupert Murdoch] doesn't appoint him, I'll be the first one to nominate him to be the successor of Mr Rupert Murdoch, God forbid if something happens to him," the prince told Charlie Rose, a US television interviewer.

Hey, I thought WE controlled the media (and the banks)