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SYDNEY – James Packer’s Consolidated Media Holdings (CMH) confirmed today its received a binding proposal from News Corp. to acquire the company in a AUS$1.94 billion ($2 billion) takeover which will secure Rupert Murdoch’s company a dominant position in Australia’s pay TV market, doubling its stake to 50 percent of major pay TV provider, Foxtel and 100 percent of sports broadcaster Fox Sports.
The sale figure, set at $3.55 a share and a 6 cents a share dividend is marginally higher than the $3.60 a share offer News Corp. through its Australian division, News Limited, made for CMH in June. .
The bid price represents a multiple of 9.4x earnings and a premium of approximately 15 percent to CMH’s volume weighted average share price over the three month period to 3 May 2012
The CMH board has recommended shareholders accept News’ offer, in the absence of another offer.
Packer, who holds 51 percent of CMH, said, “In my view, this is a great outcome for CMH shareholders and for News and it reflects a fair price.”.
“I have had the opportunity to work with some of the best media executives in the country through my shareholding in CMH:John Alexander, executive chairman of CMH, who also sits with me on the boards of some of CPH’s other investments; Kim Williams, the former chief executive of Foxtel, who I expect in his new role will guide News from strength-to-strength; as well as the representatives of CMH’s second largest shareholder-Ryan Stokes and Peter Gammell, and of course Seven Group Chairman Kerry Stokes, who have been not only excellent supporters of CMH, but also great friends,” Packer added.
Seven Group Holdings has not yet indicated if it will accept the News offer.
Seven Group, which owns the Seven television network here, has previously said its considering its options in relation to News’ offer, as well as seeking advice from competition regulator, the Australian Competition and Consumer Commission, which has greenlit the News offer, on whether it could make its own takeover offer for CMH.
Seven Group chief executive Peter Gammell said last month that Seven would wait for the regulator’s decision before deciding whether to accept the News offer
The sell off by Packer means he is new exiting the Australian media business, once dominated by his father Kerry Packer, who founded the Nine television network over 50 years ago. The Packer’s also ran Australian Consolidated Press (ACP) magazines, founded by Kerry’s father, Sir Frank, but which was yesterday sold to German publishing house Bauer Media. James Packer’s focus is now on his multibillion dollar global gaming and casino business.
The News Corp. acquisition of CMH is expected to be finalized in November, with Foreign Investment Review Board and shareholder approval still needed.
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