THE tantalising prospect of a showdown between Kerry Stokes and Rupert Murdoch is looming in the battle over James Packer’s $2 billion stake in pay TV company Consolidated Media.
Speculation about a bid by Mr Stokes’ Seven Group to rival News Ltd’s takeover bid increased yesterday after News Ltd and ConsMedia announced a revised lower deal worth $3.51 a share, including a 6¢ dividend.
Mr Stokes’ group has made no secret of its desire to make a play for Mr Packer’s assets but is waiting for the clearance from the Australian Competition and Consumer Commission to proceed.
”We’ll know soon,” said Evans & Partners media equities analyst Peter Stamoulis. ”It all comes down to the ACCC and whether they’ll give regulatory approval for a bid by Seven Group.”
The ACCC is likely to reveal its decision regarding Seven by September 13. News Ltd gained the watchdog’s backing in June. Seven was not available for comment.
Should the ACCC block Seven, News stands to gain control of Fox Sports, which is half-owned by ConsMedia. The agreement would also increase News’ holding of Foxtel to 50 per cent from 25 per cent. Telstra owns the other 50 per cent. Under the revised terms of the deal released yesterday, ConsMedia shareholders will receive $3.45 a share, 5¢ less than the original offer but now including a 6¢ dividend, to make the deal a cent higher than the $3.50 per share offered by News Ltd.
Mr Packer, who controls the biggest stake in ConsMedia through his vehicle Consolidated Press Holdings, repeated his support for the deal ”in the absence of a superior cash proposal”.
He said the deal was ”a great outcome for Consolidated Media Holding shareholders and for News and it reflects a fair price”. The transaction, expected to be completed by November, would pave the way for Mr Packer to exit from the pay television business and concentrate on his gaming interests.
Mr Stamoulis said News would ”see an opportunity to improve profitability and generate a return on their investment by driving down content costs on a per subscriber basis”. That would be aided by Foxtel’s monopoly positioning and national subscriber base, he said.
The deal would also bring some ”cross-promotional benefits” as the company integrates more digital media platforms, Mr Stamoulis said.
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