Mur­doch, Gor­don opt out of Ten chal­lenge

The Weekend Australian - - BUSINESS - NICK TABAKOFF

TELE­VI­SION: Me­dia ty­coons Lach­lan Mur­doch and Bruce Gor­don yes­ter­day ap­peared to pass on the op­por­tu­nity to chal­lenge the sale of the Ten Net­work to US free-to-air net­work CBS.

A 4pm court-sanc­tioned dead­line for any chal­lenge to the trans­fer to CBS came and went yes­ter­day, with no ap­pear­ance by Mr Mur­doch or Mr Gor­don to op­pose the trans­fer of Ten to CBS.

It had been sug­gested that Ten’s ad­min­is­tra­tors, Korda-Men­tha, could face a fresh chal­lenge from Mr Mur­doch’s pri­vate com­pany, Il­lyria, and Mr Gor­don’s com­pany, Bir­ketu.

How­ever, Mr Mur­doch’s cor­po­rate ad­viser, Ben Kee­ble of Fort Street Ad­vis­ers, late yes­ter­day ref­er­enced a KPMG in­de­pen­dent ex­pert’s re­port, which found that even on a best­case sce­nario, Ten was worth a to­tal of $130 mil­lion, and could well be worth­less.

Mr Kee­ble con­trasted the KPMG ex­pert val­u­a­tion with the $250m that Il­lyria and Bir­ketu were asked to pro­vide ear­lier this year as a guar­an­tee to keep the com­pany afloat un­til 2020.

He hinted that the low val­u­a­tion in the ex­pert’s re­port jus­ti­fied the de­ci­sion by Mr Mur­doch and Mr Gor­don not to ex­tend and in­crease its guar­an­tee on Ten.

“If you look at the KPMG re­port, and the con­clu­sion that even in the most op­ti­mistic case Ten has an en­ter­prise value of ap­prox­i­mately $130m, it is very clear why the share­holder guar­an­tors reached the con­clu­sion that they were not pre­pared to in­crease the guar­an­tees to $250m, or ex­tend to 2020,” Mr Kee­ble said.

By de­clin­ing to file an ap­pear­ance in court yes­ter­day, it is be­lieved that Mr Mur­doch has de­cided to ef­fec­tively walk away from any prospec­tive chal­lenge to the CBS deal, sub­ject to its fi­nal clear­ance by the For­eign In­vest­ment Re­view Board.

Ear­lier this year, Mr Gor­don and Mr Mur­doch — who is also the co-chair­man of News Corp, pub­lisher of The Week­end Aus­tralian — were each asked to al­most dou­ble their re­spec­tive guar­an­tee ex­po­sures to Ten via a Com­mon­wealth Bank loan, from $66.7m each pre­vi­ously to a new fig­ure of $125m each.

This week’s KPMG ex­pert’s re­port in­di­cated un­cer­tainty as to whether Ten would ever be in a po­si­tion to re­pay the CBA fa­cil­ity. In this sce­nario, Il­lyria and Bir­ketu would have been li­able to re­pay any short­fall.

On Mon­day, there will now be a di­rec­tions hear­ing on the pro­posed com­pul­sory share ac­qui­si­tion by CBS. At this hear­ing, it will quickly be­come clear if any other share­hold­ers of Ten in­tend to chal­lenge the share trans­fer to CBS.

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