Foxtel confirms $77m investment in 15% of TEN

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Foxtel has just confirmed it will acquire 15% of TEN at $77m.

Here is their release:

Foxtel today announced it would invest up to $77m in Ten Network Holdings Limited (“Ten” or the “Company”) as part of a broader equity raising by Ten. Depending on the outcome of the Entitlement Issue to Ten shareholders, Foxtel will acquire a position of up to 15% of Ten’s diluted share capital.

As part of this transaction Ten is to take a 24.99% equity position in Multi Channel Network (“MCN”), the advertising channel joint venture between Foxtel and Fox Sports. MCN has separately signed a sales representation agreement with Ten where it will act as the Company’s advertising sales agent. This collaboration is expected to provide Ten with synergies and improved access to advertisers.

In addition, Ten will have an option for two years to become at 10% shareholder in Presto TV Pty Limited.

Foxtel will nominate a director to the Ten Board as part of this transaction.

Foxtel’s Chief Executive Officer, Richard Freudenstein, said, “We believe our investment in Ten is a win-win for Ten and Foxtel. With Foxtel’s local knowledge and expertise, and MCN delivering synergies and improved advertiser access, this proposal delivers the best long-term solution for a revitalised, competitive and profitable Ten.”

Each of the proposals, other than the sales representation agreement, is subject to regulatory clearances including by the ACCC.

TEN announced a capital raising of up to $154 million, with Foxtel taking up to $77 million worth of issue shares at 15 cents per share, and TEN able to take part in a further $77 million raising.

In a statement TEN CEO Hamish McLennan said, “Today’s announcement represents an important milestone for TEN and the conclusion of the strategic review process initiated by the Board last year. It positions TEN to drive long-term value for shareholders.

“The Board believes the agreements with Foxtel and MCN will materially enhance TEN’s business and better equip it to respond to the challenges of the ever-changing media and advertising landscape. We welcome Foxtel’s proposed investment and we are confident this proposal will drive value for all of TEN’s shareholders.

“By joining forces with MCN, TEN will gain new efficiencies, improved data capability and provide broader integration opportunities for its advertising clients,” he said.

“The combined sales operation will provide advertisers a new way to reach consumers across all video content distribution platforms.

“TEN’s ratings and revenue performance has materially improved this year as a result of a clear focus on our core audience of people aged 25 to 54, and a disciplined and selective investment in content. Our total prime time primary channel audience has increased 18 per cent this year.

“Our Chief Sales Officer, Louise Barrett, and her team have done an outstanding job growing TEN’s revenue base, capitalising on much improved audience numbers. The advertising sales representation arrangement with MCN is a step change and will enable us to further leverage our growing audience with enhanced scale and a broader, more targeted and efficient offering.”

14 Comments:

  1. TasTVcameraman

    Does this also mean that we can expect to see some of Foxtel programming on TEN ? I can see the reason if it does happen, it costs a lot to make a show if you can on sell the show to a friend, at a cheaper price it bodes well for both. expect to see a lot of ads spruiking Foxtel on TEN.

  2. < 15% doesn't require approval from the other shareholders i.e. they can't block it.
    It's not a controlling interest (even with Murdoch's personal 8% holding, though he may sell that once he becomes Co-Executive Chairman of 21st Century Fox).

    What the ACCC is worried about is Foxtel's Fox Sport STV sport monopoly being used to destroy Seven and Nine to boost Ten (with the proceeds ending up up in News Corp US without any tax being paid). They allowed Packer to get away with owning Nine and 50% of Fox Sports, but wouldn't let Stokes buy up Packer's share of Fox Sports because he controlled Seven. We will see what they say about Foxtel controlling Fox Sports and owning a small non controlling share of Ten.

  3. Could we really have expected anything less from Hamish McLennan and his News Corpse history?
    And Lachlan – owner of the Nova radio group, direct ownership of about 8 per cent of Ten and his chairmanship of News Corp that owns half of Foxtel and all of Fox Sports. Plus he’s about to take over the reins of 21st Century Fox.
    I like the headline over the Fairfax report: “The Fox is in the Tenhouse”.
    It’s little Lachlan doing a back-door job.

      • Actually its the ARU who deals with the negotiations. What I think ARU should do is make Ten air 1 match live for the home and away season with all finals live and the rest on tape delay for Super Rugby and make Ten have all Tests and Spring Tour exclusively live with Foxtel having replayed rights

        • There’s a good chance Nine and Seven could lose some or all games of the AFL/NRL. If that happens, there’ll be more room for rugby than ever.

          Also, if Fox Sports is woking against you on the other two codes, make Super Rugby as expensive as possible for them.

    • I believe that Ten might win the next AFL rights for 2017-21. Remember 9 will still have 3 years of NRL telecast left before other networks bid for the rights.

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