News Corp in $2 billion Australia pay-TV bid; Packer cashes u

  • Business
  • Wednesday, 20 Jun 2012

MELBOURNE: Rupert Murdoch's News Corp made a $2 billion takeover offer for Australia's Consolidated Media Holdings on Wednesday, boosting top shareholder and billionaire James Packer's warchest as he abandons media in favor 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 percent.

For News Corp, a successful bid would double its stake in Australia's dominant pay TV business Foxtel to 50 percent, and give it 100 percent of content provider Fox Sports.

"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," he said.

Shares in Consolidated Media jumped 10 percent to A$3.39, just below the A$3.50 a share offer, which was pitched at a 14 percent premium to its last close.

"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.

He is renowned for his perfectly timed sale of the Nine Network TV in 2006 for A$4.5 billion, one of the last big acquisitions by private equity before the financial crisis struck. The owners of Nine are now battling to refinance their debt.


Analysts believe Packer is seeking to control Echo, without necessarily making a full bid. Packer earlier this month successfully lobbied to oust the company's chairman, arguing he bungled the handling of a sexual harassment allegation, and is trying to get regulatory approval to hold more than 10 percent of the casino group.

The bid by News Corp's local unit, publisher of The Australian, The Daily Telegraph and Herald Sun, to increase its pay-TV interests comes as it is expected to announce deep cost cuts and job losses in its print business as soon as Wednesday.

"It makes sense for them to acquire Consolidated Media and the price seems reasonable," Xiradis said.

Shares in Seven Group, controlled by Australian billionaire Kerry Stokes, were up 3 percent at A$8.13 by 0154 GMT.

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