Thursday June 21, 2012
News Corp makes US$2bil bid for Australia pay-TV
MELBOURNE: Rupert Murdoch's News Corp made a US$2bil takeover offer for Australia's Consolidated Media Holdings, boosting top shareholder and billionaire James Packer's war-chest as he abandons media in favour of casinos.
Packer, who has built stakes in casinos in Australia, London, Macau and Las Vegas, indicated he would accept the offer in the absence of a higher bid for the pay-TV stakeholder, in which he holds 50.1%.
For News Corp, which also announced sweeping cost and job cuts in Australia yesterday, a successful bid would double its stake in Australia's dominant pay-TV business Foxtel to 50%, and give it 100% of content provider Fox Sports.
Packer recently took a 10% stake in Sydney casino-owner Echo Entertainment, through his Crown Ltd, amid speculation he wants to use Echo's licence to build a new casino complex in Sydney to attract more Asian high-rollers.
“It frees up more cash and gives him a bit more flexibility,” said Paul Xiradis, managing director of Ausbil Dexia, which owns stakes in News Corp and Echo. “He's shown his hand in Echo but his intentions are not well and truly understood.”
Shares in Consolidated Media jumped 10% to A$3.39, just below the A$3.50-a-share offer, which was pitched at a 14% premium to the last close.
A sale would see Packer all but exit what was once a media empire, built up over decades by his father Kerry Packer and grandfather Sir Frank Packer, apart from a 10% stake in television company Ten Network.
“My family has a long history in media but I am a pragmatist. This is a good deal,” Packer was quoted as saying from London by the Australian Financial Review.
“This proposal would suggest that my long-term interests lie in the entertainment and gaming side of my business,” he said.
Packer has a 48% stake in Crown, which owns Melbourne's Crown Casino, and has built up a casino business in Macau in partnership with Hong Kong businessman Lawrence Ho. - Reuters