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NDS Group plc Company News Alert News Corp proposes to take NDS private NASDAQ Common Stock
Ticker: Target price: Current price: Price change since last report:

30 June 2008

BUY

NNDS US$60.21 US$49.70 (7.6%)

According to the press release filed by NDS Group plc (NDS) on 27 June 2008, News Corporation (News Corp) ,NDS’s the parent company and Permira Newcos (Permira), which is formed by funds proposed by Permira Advisers LLP (an international private equity firm) have announced a proposal to take NDS private. If the deal is finalized, NDS would be delisted from the NASDAQ stock exchange. However, the transaction is still subject to court approval, in light of which, we do not anticipate a change in our rating. In addition, If the proposed transaction does takes place, it will not change our current rating as the proposed consideration for each share matches our target price.

We will reassess the common stock rating for NDS in our next full update report. As we anticipate a positive currency impact on the European stock, we upgrade our rating from a HOLD to a BUY, as the current stock price supports a BUY rating. We expect to revise our investment horizon for this company from 6-12 to 6-24 months in our next update report, as we do not anticipate a significant currency impact on the European stock in the medium term.

European Stock1
Ticker: Target price: Current price: Price change since last report:

BUY
NNDSy.F €35.84 €31.98 (7.6%)

We will reassess the European stock rating for NDS in our next full update report.

Supervisor: Jinesh Joshi Analyst: Saurabh Jain Editor: Shem Pennant Global Research Director: Satish Betadpur, CFA Next news due: FY 2008 results, August 2008

Investment horizon - short term actionable trading strategies
This report addresses the needs of strategic investors with a long term investment horizon of 6-12 months. If this report is provided to you by your broker under the Global Settlement, you may now also access (free of charge) the short term trading outlook that we publish from time to time for this issuer, looking at the coming 5-30 days for readers with a shorter trading horizon. These are available on-line only at www.researchoracle.com.

In our 3Q 08 update report, dated 23 May 2008, we rated the common stock a BUY based on our fundamental valuation of NDS, with a target price of US$60.21, representing a potential 12% upside. The common stock has depreciated 7.6% since our previous update report. News Corp (which currently holds a 72% stake in NDS) and Permira, have made an offer to NDS, as a result of which, NDS would cease to be a public company. Furthermore, all of its A-class shares, which include American Depository Shares (ADS) listed on NASDAQ would be cancelled. The 68% of B-class shares owned by News Corp would be cancelled and the balance would be retained by News Corp. NDS will then issue new B-class ordinary shares to Permira to make it an owner of 51% of the stake in NDS while News Corp would then own 49%. The shares of NDS would be delisted from the NASDAQ stock exchange post-transaction. The proposed consideration for each share cancelled (both class-A and class-B) is US$60.00, representing a premium of 20.7% over the NASDAQ common stock closing price of US$49.70 on 27 June 2008. According to the press release, the transaction would be effective in the fourth quarter of 2008. However, the transaction is still subject to court’s approval. In light of these factors, we do not anticipate change in our current rating. If the proposed transaction does takes place, it will not change our current rating as the proposed consideration for each share matches our target price.

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