Consolidated Media to back News Corp take over offer
07 Sep 2012
Consolidated Media Holdings Ltd has agreed to back a revised A$2-billion takeover offer from Rupert Murdoch's News Corp , in a deal that would see News Corp get a greater share of Australia's pay-TV market.
With a successful takeover, the decks would be cleared for billionaire James Packer, who holds a 50.1-per cent stake in Consolidated Media, to exit his last big media venture to focus on gambling.
With the deal, News Corp's Australian unit would get a 50-per cent stake in dominant pay-TV operator Foxtel and 100 per cent of content provider Fox Sports, boosting its pay-TV exposure even as it cuts back print operations.
According to Consolidated Media (CMH), the offer had been approved by its board in the absence of a higher bid.
The binding proposal from News Corp represented an implied multiple of 9.4 times forward earnings, as also a premium of 15 per cent to the average share price over the past three months say analysts.
"In my view, this is a great outcome for CMH shareholders and for News and it reflects a fair price," Packer said in a statement.
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