CMH $2b deal on track

CONSOLIDATED Media Holdings (CMH) believes it can wrap up a $2 billion takeover deal with Rupert Murdoch’s News Ltd within months.

James Packer’s media company, which owns 25 per cent of pay TV provider Foxtel and half of Fox Sports, gave an update on the takeover as it unveiled a 15.7 per cent fall in full-year net profit yesterday.

CMH said some preconditions to the deal remained outstanding, including the finalisation of due diligence and approvals from the board of News Corporation and the Foreign Investment Review Board.

CMH executive chairman John Alexander said it was expected the preconditions would be satisfied within six weeks.

‘‘It may well be earlier, allowing the parties to finalise the negotiation of the scheme implementation deed,’’ he said.

If the necessary approvals are given, the deal could be completed in the final quarter of 2012.

‘‘However, as the preconditions remain outstanding, we cannot give any assurance that a scheme implementation deed will be signed o r t hat a t r a ns a c t i o n might proceed.’’

News, which

has

received

the green light for its bid from the competition watchdog, already owns 25 per cent of Foxtel and half of Fox Sports.

However, waiting in the wings is billionaire Kerry Stokes, whose Seven Group has signalled it may launch a rival offer. Seven already holds a 24 per cent stake in CMH.

CMH made no comment about a potential offer from Seven as it reported its statutory net profit for 2011-12 fell to $85.8 million from $101.7 million in the prior year.

Operating profit, which excluded the effect of Foxtel’s acquisition of regional pay TV provider Austar and costs arising from the PBL demerger, rose per cent $97.9 million, mostly due improved profit from Foxtel.

Foxtel, excluding Austar, contributed $42 million to CMH’s earnings, up $4.4 million on the prior year. But Fox Sports’ contribution fell by $2.1 million to $49.4 million.

Mr Alexander said Foxtel generated modest subscriber growth, with 1.68 million homes signed up by the end of June compared to 1.65 million a year ago.

CMH declared a final franked dividend of 6¢ a share, compared to an unfranked 6¢ a year ago.

CMH shares closed steady $3.44 yesterday. to t o

at