The embattled Rupert Murdoch is selling his advertising business in Russia as the phone-hacking scandal drags on and new allegations regarding his News Corp emerge every day.
News Corp (NWSA:NSQ) has sold a 79 per cent stake in its Russian outdoor advertising company News Outdoor to Russian state-owned VTB Capital and Alfa Group, after years of looking for possible investors.
News Outdoor was bought by a group of investors, including Alfa Group, VTB Capital (VTBR:MCX) and CTC Media founder Peter Gerwe, Russian newspaper Kommersant reported on Friday. VTB Capital confirmed the information to beyondbrics.
News Outdoor operates billboard advertising business in Russia, Czech Republic, Bulgaria, Romania and Ukraine and is worth an estimated $350m, according to Kommersant. The company operates 60,000 “advertising faces” (billboards to you and us) across the world. News Outdoor’s management, headed by Maxim Tkachev, will retain a 21 per cent stake in the company.
It’s not the first time Murdoch has tried to sell his Russian advertising company. The search for a potential buyer started in the summer of 2007. Negotiations with French JCDecaux were held in 2008, when the global economic crisis broke and the French company lost its interest in the business.
The sale is part of News Corp’s departure from the outdoor advertising business. However, according to reports, it will continue to operate News Outdoor Czech Republic.
Murdoch moved into the Russian advertising business in 2001. It was not a smooth ride. In September 2008, Russian authorities raided News Outdoor Moscow’s offices. For Murdoch, this was part of a growing number of disputes between the government and out-of-favour businesses.
In 2006, News Outdoor was fined 1.34bn roubles ($45m) for not letting tax officials check its offices after the company switched to a news tax system without delivering required documents. The company appealed against the decision on several levels, but lost. Last summer, the Moscow arbitration court finally dismissed its appeals, the Russian news agency RIA Novosti reported.
Get alerts on Emerging markets when a new story is published