Packer-Murdoch gang rides again

Duo's $3.3 billion takeover bid first team-up since '01

James Packer and Lachlan Murdoch, the sons of Australia's two greatest media moguls, said Monday that they will launch a joint takeover bid for two-month-old Consolidated Media Holdings, the Packer-controlled media group spun off from Publishing and Broadcasting Ltd. in November.

The pair plans to privatize CMH, which owns blue-chip Australian media assets including 25% of pay TV provider Foxtel; 25% of PBL Media, which owns the Nine TV Network; leading publishing company ACP Magazines and a variety of digital media businesses; 50% of Fox Sports; and about 27% of online job site Seek Ltd.

The bid reteams Packer and Murdoch, who made headlines in 2001 when they jointly invested in telecom One.Tel, only to lose more than AUS$400 million ($344.2 million).

Under the proposal announced to the Australian Stock Exchange, Murdoch's private investment company, Illyria Pty Ltd., which initiated the deal, and Packer's Consolidated Press Holdings will form a joint venture vehicle to buy 100% of CMH. Local reports say that Murdoch will become chairman of the group.

Trading in CMH stock was halted today at AUS$3.86 ($3.40) a share, valuing CMH at AUS$2.7 billion ($2.32 billion), while the Packer-Murdoch al-liance is offering AUS$4.80 per CMH share valuing it at AUS$3.31 billion ($2.85 billion) with a maximum cash component of AUS$2.8 billion ($2.41 billion).

The deal ends much speculation over the business plans of Lachlan Murdoch, who stepped aside from day-to-day involvement in News Corp. in 2005. Murdoch returned to live in Australia not long afterward and was prevented by a no-compete agreement from involvement in any other media business.

Murdoch is still a director of News Corp. but his father's company reportedly has no involvement in this bid.

A statement from CMH, which met Monday to begin considering the proposal, said the deal is subject to a number of pre-conditions including due diligence, financing, shareholder approval and several other conditions, as well as further details of the deal with Illyria.