Packer restructures gaming, media interests

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SYDNEY -- James Packer has again restructured his gaming and media interests, announcing Tuesday that he is splitting his AUS$15 billion ($12.3 billion) company, Publishing and Broadcasting Ltd, into two separately listed gaming and media companies.

PBL's media interests will be housed in a new company called Consolidated Media Holdings, while the gambling businesses will de-merge into Crown Ltd.

At the same time, Packer is handing control of his media interests to his lieutenant, John Alexander, who becomes executive chairman of CMH. Packer becomes deputy chairman, while the roles are reversed on the Crown board.

As part of the restructure, PBL said it will look to sell off its film interests -- which include 50% of Australian exhibition and distribution company Hoyts and 25% of U.S. production shingle Regency Enterprises. Further details on that process were not available.

In a statement, Packer said it was time to "let these two businesses prosper in their own right."

"Investors will have the opportunity to invest in a strong and growing pure play media company and also in a world class gaming company," he said.

Added Alexander: "The restructure will offer shareholders a clear choice of investment, providing each business with improved flexibility, a clear mandate and improved cost of capital. It will also provide shareholders a more direct and efficient avenue to access our exciting investments in Foxtel and Fox Sports."

The move comes just six months after PBL spun off most of its media assets into new joint venture PBL Media with private equity investors CVC Asia Pacific. PBL raised AUS$3 billion ($2.46 billion) in gross cash from the deal.

CMH's portfolio will include 50% of PBL Media, 25% of pay TV operator Foxtel, 50% of pay TV sports broadcaster Fox Sports, 27.1% of online jobs company Seek and 100% of Ticketek.

PBL Media includes 100% of ACP Magazines, the Nine TV network, 50% of ninemsn, 33% of Sky News and majority interests in the Web sites carsales.com.au and myhome.com.au.

Some 65% of CMH's earnings will be generated from its "high-growth new media assets," Packer said.

PBL shares climbed AUS$1.26 ($1.03), or more than 6%, to AUS$21.99 ($18.03) on news of the deal.

Shaw Stockbroking media analyst Greg Fraser said that the separation has long been a favorite topic of analysts but that the timing has never suited PBL until now.

"With the sale of half of ACP Magazines and the Nine Network into the PBL Media joint venture, PBL was clearly signalling its intention to focus mainly on expanding its gaming assets globally," he noted. Fraser said that the separation now allows the market to more accurately value each business according to its industry.

Crown is expected to be in the top 50 listed companies on the Australian stock exchange, while Consolidated Media will be in the top 100.

The restructure will be put to shareholders for approval in August.

Shareholders will receive one share each in Crown and CMH, plus AUS$3.00 ($2.46) cash for each PBL share held, with approximately AUS$2 billion ($1.64 billion) returned to shareholders. Investors will hold the same number of shares in Crown and CMH after the plan is fully implemented.
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