Lachlan Murdoch Loses Challenge to CBS's Bid for Ten Network
18 Settembre 2017 - 08:22AM
Dow Jones News
By Rob Taylor
CANBERRA, Australia--Television entrepreneur Bruce Gordon and
Lachlan Murdoch, the son of media mogul Rupert Murdoch, have lost a
legal bid to thwart the takeover of insolvent Ten Network Holdings
Ltd. by U.S. broadcasting giant CBS Corp.
Messrs. Gordon and Murdoch had challenged in court the proposed
buyout of Ten Network--worth 201.1 million Australian dollars
(US$161 million)--arguing their own bid to buy the company wasn't
properly considered by insolvency specialists KordaMentha in
deciding to favor CBS's bid last month.
On Monday, however, the Supreme Court in New South Wales state
dismissed the challenge, clearing the way for a meeting of
creditors on Ten Network's future Tuesday.
"I am not satisfied that the plaintiffs have established that
any deficiencies...such as to warrant orders requiring that further
information be provided to creditors or that the second creditors'
meeting be restrained," judge Ashley Black said in his Monday
determination.
Messrs. Gordon and Murdoch said they would appeal the
decision.
Mr. Murdoch is co-chairman of News Corp, which owns The Wall
Street Journal publisher Dow Jones, while Mr. Gordon controls a
company that owns regional broadcasting licenses across
Australia.
Ten Network was placed into voluntary administration in June,
with administrators last month recommending the sale of the company
to CBS. Messrs. Gordon and Murdoch--who is also executive chairman
of 21st Century Fox--launched a fresh bid for Ten Network on Friday
after Australia's Parliament passed laws easing ownership controls
in the media sector.
At the meeting Tuesday, creditors will consider resolutions
including selling Ten Network to CBS, while a KordaMentha spokesman
said participants would likely also consider the "late bid" by
Messrs. Gordon and Murdoch and possibly ask for an adjournment to
allow more consideration. Resolutions require approval both from
creditors and Ten's 750 employees.
Australia's traditional media outlets, including The Wall Street
Journal publisher News Corp, have been hard hit in recent years by
falling advertising revenue as audiences embrace digital
platforms.
Parliament last week abolished a 75% audience "reach rule" that
prevented free-to-air television networks like Nine Entertainment
Co., Seven West Media Ltd. and Ten Network from snapping up
regional affiliates. It also abolished the two-out-of-three rule
that prevented large media companies from controlling free-to-air
TV stations, newspapers and radio stations in the same market.
Messrs. Gordon and Murdoch had sought a declaration from the
court that KordaMentha's report to creditors on the proposed CBS
tie-up didn't provide adequate information about their joint bid
for Ten Network, which last year posted losses of A$157
million.
They also sought to lower the weighting of CBS's own vote on the
merger. The U.S. behemoth was the largest creditor before the
network went into administration, giving it a strong say over
possible outcomes. CBS is owed about A$350 million, while Fox--the
second largest creditor--is owed about A$125 million, mostly as a
result of program contracts.
Judge Black said the question of "which of any competing
commercial proposals put by interested parties would be most
advantageous" to Ten Group creditors was a matter for creditors and
shareholders. He ruled that CBS wouldn't be restricted in
voting.
Write to Rob Taylor at rob.taylor@wsj.com
(END) Dow Jones Newswires
September 18, 2017 02:07 ET (06:07 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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