-- News Corp. makes A$1.94 billion bid for Consolidated
Media
-- Bid is A$3.45/share, less than previous non-binding offer
-- Shareholder James Packer says bid price fair
(Adds share reaction in third paragraph, Seven Group comment
from ninth)
By Gavin Lower
MELBOURNE--News Corp. (NWS) bid 1.94 billion Australian dollar
(US$2 billion) for Australia's Consolidated Media Holdings Ltd.
(CMJ.AU) as the media giant seeks to boost its presence in the
nation's pay-television market.
In a statement Friday, Consolidated Media said News Corp., owner
of this newswire, had made a A$3.45-a-share bid for the company,
lower than its non-binding proposal of A$3.50-a-share in June and
only slightly above the A$3.42 level the shares traded at before
the bid was announced. The media-investment company's shares closed
down 0.6% at A$3.42 in Sydney, while News Corp. gained 1.5% to
A$23.86.
News Corp. and Consolidated Media each own 25% of Australia's
largest pay-TV company Foxtel and 50% of sports-channel Fox Sports.
Australian telecommunications company Telstra Corp. (TLS.AU) owns
the rest of Foxtel.
Consolidated Media said shareholders would additionally receive
a final dividend of 6 Australian cents a share--which means they'd
get the equivalent of A$3.51 for each share under News Corp.'s
bid.
It said most of its directors recommended that shareholders
accept the bid, and that Australian casino billionaire James
Packer, whose Consolidated Press Holdings owns 50% of the company,
intended to vote in favor of the deal.
"In my view, this is a great outcome for CMH shareholders and
for News and it reflects a fair price," Mr. Packer said in the
company's statement.
The deal may face opposition from Consolidated Media's other
major shareholder--Seven Group Holdings Ltd. (SVW.AU), which owns
25% of the company and has asked Australia's competition regulator
to consider whether it could buy the shares in Consolidated Media
it doesn't already own.
A spokesman for Seven Group declined to comment on the News bid,
saying only there was no change to Chief Executive Peter Gammell's
comments last month that the company was yet to decide on whether
to sell its stake.
"It's hard to make a decision without a proposal. In the
fullness of time I'm sure that News will come forward with some
proposal and we'll give you our reaction at that time," Mr. Gammell
said on August 28.
Consolidated Media directors associated with Seven Group
declined to make a recommendation on News Corp.'s bid, Consolidated
Media said.
Seven Group also owns 33% of media company Seven West Media Ltd.
(SWM.AU), and its request to the Australian Competition &
Consumer Commission has been widely seen by analysts as a tactic
either to extract a sweetened bid from News Corp. or deliver a deal
on sports-broadcasting rights.
The ACCC has already said it has no objections to News Corp.'s
bid and is yet to decide on Seven Group's proposal.
Write to Gavin Lower at gavin.lower@wsj.com
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