U.S. broadcaster Fox Corp. on Monday agreed to buy Credible Labs in a deal valuing the online finance broker at $397 million, as the Murdoch-controlled firm hunts for growth following the sale of its film and TV assets to Walt 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's film and television assets to Disney.
The smaller firm now relies on costly live cable sports and news in an increasingly competitive television industry.
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 (TREE.O), 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%.