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.”