Discovery Communications Reportedly Eyes Australia's Ten Network
Any deal involving Ten would need the approval of shareholders, including News Corp's Lachlan Murdoch and Ratpac's James Packer
Discovery Communications is eyeing up a joint bid with Australia's pay-TV giant Foxtel for local broadcaster Ten Network, the Australian Financial Review reported Thursday.
The joint Discovery/Foxtel bid would reportedly give Foxtel a 14.9 percent stake in Ten, Australia’s third-ranked commercial broadcaster. AFR first reported on Discovery's interest in Ten on Wednesday.
Ten, the home of The Bachelor Australia and Masterchef Australia, has been struggling of late, cutting both staff and programs in the face of falling revenue. The network shopped itself around interested parties last week through its advisers Citi, and was asking for preliminary non-binding bids. AFR said Ten management had set an informal deadline of late November for potential bidders.
A Discovery representative declined to comment.
Discovery and Foxtel are considered frontrunners for Ten, but price would be the deciding factor. Goldman Sachs is advising Discovery on any potential bid, with Aquasia advising Foxtel.
The move by Discovery would be its latest attempt to move into commercial broadcasting after pulling out of the bidding for the U.K.'s Channel 5. Discovery picked up pan-European sports channel Eurosport earlier this year.
A News Corp subsidiary, Foxtel's part in the potential deal is fraught with political as well as commercial hurdles, but the company avoids legal scrutiny if it keeps its stake below the 15 percent mark, hence the rather precise nature of its stake. AFR's sources believe Foxtel would likely have the option to increase its stake in Ten if media laws were relaxed in the future.
Ten's shareholders include a veritable who's who of Australian media, including mining billionaire and largest shareholder in Fairfax Media Gina Rinehart, News Corp co-chairman Lachlan Murdoch, Ratpac Entertainment chairman James Packer and WIN Network owner Bruce Gordon.
The AFR report says Packer and Murdoch are willing sellers, whereas Gordon's intentions are less clear.