Packer, Murdoch CMH deal on ropes

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SYDNEY -- James Packer and Lachlan Murdoch's proposed buyout and privatization of Consolidated Media Holdings Ltd. stalled Thursday as CMH advised the Australian Stock Exchange that one of the consortium's backers had withdrawn its support for the AUS$3.3 billion ($3.1 billion) deal.

CMH, one of Australia's largest diversified media companies, said in a statement that it had been advised by Illyria, Murdoch's private investment company, that San Francisco-based private equity group SPO Partners' financing had been withdrawn "primarily due to changes in investment conditions specific to SPO."

Local reports said that SPO pulled out due to the rising Australian dollar, which this week hit a 25-year high of 93 cents on the U.S. dollar, with the global credit squeeze making debt financing more problematic.

Murdoch said that Illyria is in discussions to replace the SPO equity commitment from within its existing investor group and third parties. Murdoch said due diligence had been progressing well and it remains "enthusiastic" about the deal.

Packer and Murdoch, the sons of Australia's two greatest media moguls, announced in January that they planned a joint takeover bid for two-month-old Consolidated Media Holdings, the Packer-controlled media group spun off from Publishing and Broadcasting Ltd. in November.

The pair plan to privatize CMH, which owns blue chip Australian media assets including 25% of pay TV provider Foxtel; 25% of PBL Media, which owns the Nine TV Network; leading publisher ACP Magazines; 50% of Fox Sports; and about 27% of online job site Seek Ltd.
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