Report: Shareholders to get nothing in TEN deal
Deal will see TEN delisted from the sharemarket. Takeover sparks more debate on media reforms.
- Published by David Knox
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More details are emerging on the CBS acquisition of Network TEN with reports claiming TEN will be delisted from the sharemarket.
CBS reportedly submitted an $843 million claim, believed to be the balance that TEN owed for a programming rights contract.
Secured loans include at least $98 million to Commonwealth Bank, $841,000 to Westpac and $640,000 to ANZ Bank, according to a list of creditors. This means CBS will take over TEN for about $123 million. Fees of about $33 million owed to James Packer, Lachlan Murdoch and Bruce Gordon will be paid however, shareholders will reportedly receive nothing.
Major TEN shareholders include Foxtel with 13.9% of shares, Gina Rinehart with 8.2%, and Seven Group Holding’s subsidiary Network Investment Holdings with 3%.
“CBS will acquire 100 per cent of the shares in Network TEN,” a PPB spokesman said. “This process requires demonstrating that the shares are worthless given the quantum of the secured and unsecured claims. In such a scenario where creditors are not being repaid in full it would mean that existing shareholders would not receive any return.”
The move has also sparked a new round of debate over media reforms.
Labor leader Bill Shorten said, “CBS has saved Channel TEN so we don’t need to tamper with media diversity laws.”
But PM Malcolm Turnbull disagreed, saying, “We need to have media ownership laws that enable the industry to respond competitively to the threat from the internet, from companies like Netflix and Amazon and so forth.
“If Channel TEN is bought by CBS, fine … but you have got the rest of the industry.
“We’re standing up for Australian companies, we’re standing up for Australian jobs, and it’s about time (Mr) Shorten woke up to himself and recognised that the only beneficiaries of his opposition to media law reform are Google, Facebook, Netflix and Amazon.”
CBS boss Les Moonves sent some of his top executives to Australia last month to look at the business. “We have been able to acquire it at a valuation that gives us confidence we will grow this asset by applying our programming expertise in a market with which we are already familiar,” he said today.
Armando Nuñez, President and CEO, CBS Studios International said, CBS plans “to enhance and expand on (TEN’s) great legacy of Australian news, drama, reality and sports programming.”
TEN CEO Paul Anderson said, “CBS and TEN have had a strong relationship for a number of years; we are very excited about further developing that relationship.”
CBS will still have to clear the Foreign Investment Review Board (FIRB) but is quietly confident.
Creditors will be given the chance to vote on the deal at the second creditors’ meeting likely to be held on Friday 8th September.
Source: The Age, Australian Financial Review, SBS
7 Responses
Secured loans are secured and shareholders only get what’s left after creditors are paid. CBS is paying the other creditor’s debts so they will agree to CBS taking over Ten. Reportedly the figure was $160m p.a. for both the CBS and Fox output tdeals and Ten was close to finalising new deals for less cash before Gordon and Murdoch pulled their funding guarantees and forced Ten into administration. So the $834m is a fantasy (seems to be counting Ten taking every option forever), however it stopped anyone else making a deal to pay of creditors in exchange for Ten.
This was my first thought when the sale was announced. I feel for the little guys but not too bothered by the impact it’ll have on the big shareholders (namely Murdoch and Gordon who reported caused all this mess for the sake of future earnings). I have to wonder though how Foxtel can justify having their $77m 15% stake being turned to dust. This better not be passed onto the subscribers in January like everything else every other year.
This part is not surprising. At this point the only thing that was of decent value at TEN was the Brand itself and co brands. Not much else was. THe investors have lost a hell of a lot of mula. Only the secured creditors would get something out of this. Maybe TEN can still keep the BBL although Peter Cox a media analyst differed today on News 24. Either way the future of TEN is looking brighter.
Does this mean that FOX will still provide programming to TEN?
I wouldn’t if I lost what Foxtel lost?
I wonder if this means Gogglebox will no longer replay on TEN, and I guess commercials for TEN content will end on Foxtel’s own channels. A lot of speculation on content deals for a while I assume until all plans are revealed.
First of all the deal has to be approved by creditors and then the courts have to rule on it and allow Ten to end administration. CBS is settling Ten’s debts with 21C Fox and the producers of Googlebox, so the deals could continue.
Did Foxtel take a 15% share in Ten Holdings? They were planning too as part of the joint takeover with Discovery, but that needed ACCC approval and then Discovery backed out and they were waiting to see how media reforms went last I heard. The value of Ten shares fell to about zero when it went into administration (and Gordon and Lachlan’s takeover would have done the same). Newscorp has hundreds of millions of write downs from The Australian and Foxtel for it to get lost amongst if they did hold a stake in Ten.