The media organization controlled by Rupert Murdoch namely News Corp has offered to acquire all of Consolidated Media Holdings Ltd for A$2 billion in cash to double its stake in the Australia’s largest pay television network.
The offer of A$3.50 a share is subject to the approval of regulators and boards of both companies, Sydney-based company said.
The billionaire James Packer, who owns 50% of the company, backed the bid by News Corp’s Australian unit.
The transaction will give a 50% stake in the pay-TV network Foxtel and complete ownership of the Fox Sports business in Australia with broadcast rights to the most popular football codes.
James Packer will exit the last media asset he inherited and gain cash to expand his gaming empire as he aims to increase his stake in casino operator namely Echo Entertainment Group Ltd.
Peter Warnes, Sydney-based head of equities at Morningstar Inc said, “Foxtel is going to dominate sporting coverage in Australia within 10 years, and that’s where News sees the goal.” The rest of Foxtel is owned by Australia’s phone company Telstra Corp.
As per the deal, News Corp will have exclusive access to the Consolidated Media financial data and the target did not give any assurance regarding the proposal or any transaction. Consolidated Media said, the deal is not likely to be completed until the fourth quarter of 2012.
The company has retained UBS AG as the financial advisor and Ashurst Australia for the legal advice. News Corporation is an American multinational diversified mass media company headquartered in New York in U.S.
Consolidated Media Holdings is a publicly listed Australian company and its 2 shareholders are Seven Networks Limited and Consolidated Press Holdings Limited. It has 25% interest in Foxtel. Consolidated Media’s stake in Foxtel is held jointly with News Corp through a joint-venture vehicle Sky Cable Pty Ltd. The company also has 50% stake in Premier Media Group while other 50% is held by News Corporation.