Unglued: Murdoch-Packer Aussie deal falls through
Changes in terms kill troubled pactLachlan Murdoch and James Packer won't be teaming up after all.
Murdoch, son of News Corp. CEO Rupert Murdoch, on Monday pulled out of a planned buyout of 75% of the Packer-controlled Australian media group, Consolidated Media Holdings.
The deal, announced in January, would have made Packer and Murdoch joint-venture partners and privatized CMH in a deal worth AUS$3.2 billion ($2.91 billion), but the two reportedly were unable to agree on a price.
Murdoch said in a letter to CMH that his private company, Illyria, could not proceed due to "material changes in the overall transaction terms," adding that the decision to withdraw was not due to difficulty in raising money in the market.
CMH owns stakes in the Nine TV network, magazine business ACP Internet portal, ninemsn, pay net Foxtel, Fox Sports Australia and employment Web site Seek.
The deal first ran into trouble in March when Murdoch's backers, San Francisco-based firm SPO Partners, withdrew their funding for the buyout (HR 3/6).
Murdoch had since reportedly secured new debt financiers in Providence Equity Partners, headed up in Asia by former colleague and News Corp. executive Michelle Guthrie, based in Hong Kong. Packer, meanwhile, decided to sell down 38% of CMH, giving Murdoch 75% rather than 50% of the company, at the original price of AUS$4.80 a share. Providence reportedly wanted to pay just AUS$4.60.
Trade of CMH shares were halted on the Australian Stock Exchange ahead of Murdoch's announcement at AUS$4.07 a share. Murdoch said Illyria reserved the right to re-engage with CMH concerning a new proposal at any time.