No deal for Murdoch on CMH

chris

Could News Corp or Telstra be in the frame to buy the assets of Australia's CMH, which include 25% of Foxtel, now that Lachlan Murdoch's bid has, for the time being at least, failed?
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 yesterday, 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.”
Instead, rumours are that telco Telstra, which already owns 50% of Foxtel, has held exploratory talks over buying CMH. While the regulator may be uneasy about the incumbent telco owning 75% of the country's urban monopoly pay-TV platform, another option - News Corp buying the assets, is being talked up in some quarters.







Source: Rapid TV News