The Telstra Group Ltd (ASX: TLS) share price is pushing higher on Monday morning.
At the time of writing, the telco giant's shares are up 0.5% to $4.00.
This follows the release of a big announcement relating to the company's stake in the Foxtel business.
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Telstra share price higher on Foxtel news
This morning, News Corporation (ASX: NWS) revealed that it has signed an agreement with global sports streaming platform DAZN Group to sell its Foxtel business for an enterprise value of $3.4 billion. This transaction represents more than 7x FY 2024 Foxtel EBITDA.
Under the terms of the agreement, shareholder loans in the amount of $578 million outstanding and owing to News Corp will be repaid in full in cash at closing.
In addition, Foxtel's current debt will be refinanced at closing and transfer with Foxtel, and News Corp will hold a minority equity interest in DAZN Group of approximately 6% as well as one seat on its Board of Directors.
Completion is expected in the first half of 2025. This is subject to regulatory approvals.
What about Telstra?
Telstra revealed that has agreed to divest its 35% stake in Foxtel to DAZN Group.
The telco giant will receive $128 million in cash for repayment of shareholder loans. It will also hold a 3% shareholding in DAZN Group.
Management advised that the transaction is not expected to have a material impact on Telstra's FY25 guidance. Nor will it impact its profit and loss for the current financial year.
Telstra believes that the sale of Foxtel to DAZN represents an opportunity for the continued evolution of Foxtel's digital-first sports and entertainment offering within a global platform.
A 'victory' for shareholders
Commenting on the deal, Telstra's CEO, Vicki Brady, said:
Now is the right time for this change. Foxtel is a world-class streaming service, and I look forward to its continued success under DAZN's ownership.
This sentiment was echoed by News Corp's chief executive, Robert Thomson. He adds:
This agreement is a victory for News Corp shareholders, DAZN, and sport fans in Australia and around the world. Foxtel has been transformed into a genuine digital and streaming leader in Australia, and we believe DAZN is the right owner to take the business to the next level with their technological capabilities, global footprint and compelling sports rights.
This transaction also allows News Corp to focus on our other growth pillars of Dow Jones, Digital Real Estate and Book Publishing, while benefiting from repayment of our shareholder loans and an improved credit profile. We are proud to be a long-term partner of DAZN and its talented team.
The Telstra share price is trading largely flat in 2024.
