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Discovery Communications’ joint bid with Foxtel to acquire Australia free-to-air broadcaster Ten Network Holdings could be thwarted by Ten’s largest individual shareholder, billionaire Bruce Gordon who wants to keep the network in Australian hands, according to a report Tuesday in business paper the Australian Financial Review (AFR).
Former Paramount International Television president Gordon, who holds a 14.9 percent stake in Ten, and also owns Australia’s largest regional broadcaster Win Corp., is proposing a debt restructure and recapitalization which could give him more control of the network, rather than allowing Ten to be sold for $0.19 (AU$0.23) a share to a joint venture involving U.S. cablecaster Discovery Communications and local pay TV group Foxtel, half-owned by Rupert Murdoch‘s News Corp.
Ten’s board, led by a team of independent directors, is continuing to assess bids for the broadcaster, after a three week break coinciding with the Christmas and Australian summer holidays. Currently the Discovery-Foxtel bid – valuing the third ranked broadcaster at $483 million – is the front runner in the auction, ahead of other U.S. media and private equity groups Anchorage Capital and Haim Saban’s Saban Capital.
But any sale is far from certain. At Ten’s annual shareholders meeting on Dec. 16, director Brian Long said that “[w]e’re currently considering our position… and there’s no guarantee or commitment that anything will happen”.
According to the report, Ten shareholder and former chairman as well as present News Corp co-chair Lachlan Murdoch has been lobbying Gordon to accept the Discovery-Foxtel bid.
Sources close to WIN, told AFR that Gordon is “simply not going to support” a joint Discovery-Foxtel takeover. “Gordon said in November that U.S. cable companies had limited scope to improve Ten’s fortunes and questioned a sales process run by investment bank Citi that could allow a U.S. cable giant to buy the broadcaster behind Masterchef Australia, The Project and Neighbours at these nickel-and-dime prices.” Gordon is however reportedly keen on local broadcaster Foxtel to invest in Ten.
While the value of Ten’s stock has plummeted in the last four years, amidst a slump in ratings and revenues, the broadcaster’s ratings over the southern hemisphere summer have grown. Led by is coverage of the domestic T20 cricket competition, Ten said on Tuesday that it’s ratings had grown 7.2 percent over the last six weeks, the network’s best performance in a decade.
Discovery declined to comment.
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