No deal for Murdoch on CMH

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The signs were all good, but after talks lasting all weekend with private equity firm Providence Equity Partners, Lachlan Murdoch has been forced to call off his A$3.2 billion attempt to buy into the Australian media sector.

Murdoch’s Illyria had agreed to buy 50% of Consolidated Media Holdings (CMH), with James Packer taking the other half of the company, but the deal collapsed today, April 7 after Murdoch failed to find finance.

Despite the involvement of ex-News Corp/Star TV executive Michelle Guthrie, Providence and Murdoch could not agree a price for the CMH assets, which include 25% of pay-TV platform Foxtel and 50% of Fox Sports operator Premier Media Group. These assets account for some 80% of CMH’s earnings.

Part of the problem is thought to have been that Packer changed his mind on the holding he wanted in the company, reducing it from 50% to 25% and leaving Murdoch to find extra cash for the deal which would have left Illyria and its financiers with 75% of CMH. But while Providence was willing to take the extra stake, putting about A$900 million in for Illyria’s A$600 million, Packer reportedly was unwilling to lower the price for CMH’s shares. Providence was offering A$4 a share, with Packer asking the original A$4.06 a share.

In a letter to CMH, Murdoch said: “Illyria has had success in arranging equity funding and has substantially progressed its negotiations with its debt financiers…However, as of today, Illyria is not in a position to proceed with the Indicative Proposal due to material changes in the overall transaction terms.”


Source: Rapid TV News