Foxtel Seals $2 Billion Deal for Australia Cable Rival Austar
SYDNEY -- Australia's biggest pay-tv firm, Foxtel, has clinched a $2 billion-plus takeover bid for rival Austar in a deal aimed at reviving subscriber growth and taking on competition from free-to-air television stations.
Austar said it has entered into definitive transaction agreements with its major shareholder, Liberty Global Inc. and Foxtel to enable it to be acquired at A$1.52 ($1.63) per share via a series of transactions.
Austar closed at A$1.29 ($1.38) per share before the transaction was announced. Foxtel launched its bid on May 26.
Foxtel's three other high-profile shareholders -- telecoms firm Telstra , Rupert Murdoch's News Corp.'s News Ltd. division and billionaire James Packer's Consolidated Media Holdings -- have also endorsed the deal.
The acquisition still needs regulatory approvals from Australian foreign investment and competition regulators and Austar's minority shareholders.
Austar's independent directors are recommending minority shareholders accept the A$1.52-per-share offer in the absence of a higher one.
A combined Foxtel and Austar would join two of Australia's major subscription TV service providers, forming one of Australia's largest media businesses with more than 2,500 employees and anticipated revenue of more than $2.8 billion.
"A merged Foxtel and Austar would make compelling strategic sense and it would continue to invest and innovate in a superb digital service for consumers across Australia, including investing heavily in marvelous new original Australian content," Foxtel's chief executive, Kim Williams, said in a statement.
Telstra owns 50% of Foxtel, while News Corp and Consolidated Media each have 25%. Consolidated Media is owned by Australian media moguls Packer and Kerry Stokes.