News Corp.
The News Corporation building in New York Reuters

Rupert Murdoch's News Corp has decided to sell its stakes in New Zealand's pay-TV business Sky Network Television, as the media giant prepares to split its publishing and entertainment divisions.

News Ltd, a subsidiary of News Corp, will sell its 44 percent stake in Sky Network, which is the largest pay-TV operator in New Zealand, in a share placement deal.

"News Corporation announced that its News Limited subsidiary will divest its 44 percent stake in SKY Network Television Limited, New Zealand's pre-eminent pay television broadcasting service," Sky Network said in a statement.

Under the arrangement, the stake in Sky Network will be sold to "a broad range of institutional and retail investors." The shares will be sold at NZ$4.80 each, valuing the company's 44 percent stake at NZ$815m ($671m, £447m), according to a Bloomberg report, citing a person familiar with the matter and the sale is scheduled to close at 3 p.m. Sydney time on 4 March.

Following the news, trading in Sky shares has been halted. The shares last closed at NZ$5.17.

Deutsche Bank AG and Craigs Investment Partners will assist News Ltd in the share placement.

"Sky is a world-class subscription television business and has been an outstanding investment for News Corp. We and Sky have always enjoyed an excellent, arm's-length working relationship, and we expect this to continue unaffected by the sale. In particular, we do not anticipate any change to current arrangements regarding access to content and collaboration on technology," Chase Carey, president and chief operating officer of News Corp, said in a statement.

Following the sale, Michael Miller, regional director of News Ltd, will resign from the board of Sky, which owns and operates about 100 pay TV and radio channels and free-to-air channel Prime Television.

The move is line with News Corp's intention to sell of minority stakes in companies ahead of its planned split of its struggling newspaper and Australian assets and the faster growing film and TV assets into two companies.

The entertainment company to be renamed Fox Group and is expected to receive a boost in value following the split.