Packer sells 25% stake in PBL Media

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SYDNEY -- In a move that even Australian prime minister John Howard called "historic," James Packer's Publishing and Broadcasting Ltd. has sold a further 25% stake in PBL Media to its joint venture partner, CVC Asia Pacific, relinquishing control of the Nine television network and ACP Magazines and ending more than 50 years as one of the dominant forces in traditional Australian media (HR 5/30).

CVC has agreed to pay AUS$515 million ($422 million) for the additional 25% share in PBL Media, taking its stake in the company to 75%. The deal, announced Friday, includes the sale of PBL's Ticketek ticketing business along with entertainment venue Acer Arena to PBL Media for AUS$210 million ($172 million), making the deal worth a total AUS$725 million ($595 million) to PBL.

Packer, PBL's executive chairman, said the sale of the additional 25% to CVC was part of a broader reallocation of capital within PBL. "The partnership with CVC has been working well, and both John Alexander and I will be continuing on the board of PBL Media," Packer said.

It's unclear what plans CVC has for cutting costs at Nine or other PBL Media entities. Packer appointee Ian Law will continue to run PBL Media as CEO.

Adrian MacKenzie, a partner at CVC, said he was delighted to acquire an additional 25% of PBL Media on similar terms as the initial purchase of the 50% interest.

"The PBL Media business has a proven management team led by its chief executive officer, Ian Law. We believe there are a number of exciting initiatives to add value to the business," MacKenzie said.

The moves come 18 months after the death of one of Australia's most powerful media proprietors, James Packer's father, Kerry.

The sell-off means that, rather than having a controlling interest in several of Australia's major media outlets, Packer has a wider spread of investments in a variety of media assets spanning traditional and digital media.

PBL's shareholding in PBL Media may be further diluted when the 25% stake is housed in a new company, Consolidated Media Holdings , which Packer plans to list on the ASX in August after announcing plans to split PBL's media and gambling interests into two separate, publicly listed companies last month.

Commonwealth Securities analyst Craig Shepherd said selling down its stake in PBL Media was a positive for CMH.

"I think the critical thing is it makes Consolidated Media Holdings a cleaner company with more focus on the assets that have got more upside," Shepherd said.
PBL's media assets are now spread across 25% of PBL Media as well as 25% of pay TV operator Foxtel, 50% of Fox Sports and a stake in jobs Web site Seek.

Local media reports suggest that PBL now could help Foxtel finance a bid for regional pay TV operator Austar United Communications.
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