Gor­don, Mur­doch lob new Ten bid

The Weekend Australian - - BUSINESS REVIEW - DAR­REN DAVID­SON

The bat­tle for con­trol of Ten Net­work has taken a new twist af­ter Bruce Gor­don and Lach­lan Mur­doch upped the ante by tabling a re­vised bid on more “com­pelling” terms.

The move, prompted by the pass­ing of the me­dia re­form bill, will test the re­solve of Ten’s ad­min­is­tra­tors Korda Men­tha af­ter they backed a ri­val of­fer by US me­dia giant CBS that now of­fers a lower re­turn to cred­i­tors.

Less than 24 hours af­ter the Turn­bull gov­ern­ment pulled off the near-im­pos­si­ble task of scrap­ping some of Aus­tralia’s decades­old me­dia rules, Mr Gor­don and Mr Mur­doch lobbed a new pro­posal that could open a bid­ding war if CBS coun­ters the of­fer.

At lunchtime yes­ter­day, cor­po­rate ad­vis­ers Fort Street sent Kor­daMen­tha a five-page let­ter out­lin­ing Mr Gor­don’s and Mr Mur­doch’s lat­est at­tempt to take con­trol of Ten, home of re­al­ity fran­chise MasterChef and the Big Bash cricket league.

“With the pas­sage of the me­dia re­form bill now as­sured, there are lim­ited con­di­tions to the re­vised pro­posal and a sin­gle ex­e­cu­tion path,” Fort Street Ad­vi­sory wrote to Kor­daMen­tha part­ner Mark Korda.

Un­der the re­vised terms, the max­i­mum pay­ment to un­se­cured cred­i­tors has in­creased by 57 per cent from $35 mil­lion to $55m, com­pared with $32m from CBS.

The re­vised bid is 72 per cent higher than the pro­posed pay­ment un­der the CBS bid. In ag­gre­gate, Ten’s un­se­cured cred­i­tors, ex­clud­ing CBS, will re­ceive 13.4c in the dol­lar com­pared with 12.43c un­der the CBS deal.

The in­vest­ment com­pa­nies of Mr Mur­doch and Mr Gor­don, Il­lyria and Bir­ketu, em­ploy­ees and con­tin­u­ing trade cred­i­tors would re­ceive 100c in the dol­lar and all other cred­i­tors would get 5.75c in the dol­lar.

Ten will no longer be bur­dened by a con­tract with CBS that Kor­daMen­tha’s of­fi­cial re­port de­scribes as “oner­ous”, the let­ter states. It re­mains un­clear whether the re­vised of­fer will be put to cred­i­tors at the sec­ond meet­ing of Ten’s cred­i­tors, which is due to be held in Syd­ney on Tues­day, when they will vote on the CBS bid.

Kor­daMen­tha is said to be seek­ing ad­vice on whether a new bid could be ac­cepted.

CBS, which is based in New York, did not re­spond to an in­quiry at the time of writ­ing.

Un­der the new struc­ture, Mr Gor­don and Mr Mur­doch would al­low share­hold­ers to keep 25 per cent of their equity, with Ten to be relisted on the ASX.

This would en­able Ten’s 17,000 share­hold­ers to share in any re­cov­ery.

In con­trast, un­der the CBS bid, the US com­pany would own 100 per cent of the com­pany.

Un­der the CBS deal, retail share­hold­ers would get noth­ing for their stock, which prompted con­cerns from the Aus­tralian Share­hold­ers As­so­ci­a­tion and talk of a class ac­tion by dis­grun­tled share­hold­ers.

The Gor­don and Mur­doch deed of com­pany ar­range­ment pro­vides suf­fi­cient funds to al­low Ten to con­tinue op­er­at­ing and meet obli­ga­tions to staff.

With the me­dia laws soon to com­plete their pas­sage through par­lia­ment and other con­di­tions re­moved, the new bid from Mr Gor­don and Mr Mur­doch had no ex­e­cu­tion risk, sources said.

Ten would also re­mained lo­cally owned and op­er­ated, with

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