US broadcaster heads off rivals
AMERICAN broadcaster CBS Corporation is poised to usher in a new era for Australian free-to-air television, striking a deal to buy the struggling Ten Network.
In a statement to the stockmarket yesterday, Ten receiver PPB Advisory and insolvency specialist KordaMentha announced CBS had entered into a binding transaction document to acquire the business and assets of Ten.
Major Ten investors Lachlan Murdoch and Bruce Gordon were believed to have been close to clinching a deal at the weekend.
CBS, a key content provider to Ten, operates the CBS Television Network and cable networks among other assets.
Announcing the deal, the group said it would launch CBS All Access, the company’s subscription streaming service, in the Australian market.
The buyout will be subject to Foreign Investment Review Board approval, with further details to be released in coming days.
It will be funded by a refinancing of existing secured debt arrangements and a Deed of Company Arrangement that will be put to creditors at the second creditors meeting.
CBS executive chairman Leslie Moonves said Ten was “a prime broadcasting asset with over half a century of experience and brand equity in Australia”.
“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.
It is understood CBS has the largest claim against Ten as an unsecured creditor at an estimated $800 million.
A successful takeover would secure this revenue for the US group.
The fate of Ten Network, which owns the third-biggest free-to-air channel in Australia as well as other broadcast platforms, has been hanging in the balance for months.
It was put in voluntary administration in June after its biggest shareholders decided against guaranteeing a new $250 million loan to replace the existing $200 million overdraft, which needs to be repaid to the Commonwealth Bank in December.
Late last week it was thought a proposed bid by Mr Murdoch, co-chairman of Gold Coast Bulletin publisher News Corp, and Mr Gordon would be successful after the Australian Competition and Consumer Commission gave the move the green light.
US hedge funds Oaktree and Anchorage Capital had also bid for Ten.