News Limited has made a pitch to acquire James Packer's Consolidated Media Holdings (CMH), in a bid to boost its stake in Foxtel to 50%.
CMH owns a quarter of Foxtel and half of Fox Sports Australia. Telstra owns the other half of Foxtel, and has wanted to increase its stake in the pay-TV operator for a long time. While Telstra and News Limited have made the Foxtel partnership work, the move by News Limited could set up a potential tussle for the pay TV operator. If successful, the deal would give News Limited full ownership of Fox Sports Australia.
In a statement, Consolidated Press Holdings, the largest shareholder in CMH Holdings executive chairman James Packer, said he welcomes the bid from News Limited, which is priced at $3.50 a share. The takeover offer values CMH at approximately $2 billion.
The deal will need News Corporation board approval, and the green light from the Foreign Investment Review Board and the Australian Competition and Consumer Commission. That means the deal could take some to close, CMH said.
“The board of CMH can give no assurance that the Proposal or any transaction will proceed,” CMH said. “Were a transaction to proceed, it is unlikely to complete until the final quarter of calendar 2012.”
News said that it would undertake exclusive due diligence on CMH in order to ensure there were no significant liabilities attached to the target.
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