Lachlan Murdoch and Bruce Gordon threatened to sue Ten's directors just prior to the business being placed into administration, the Australian Financial Review's Chanticleer column has alleged.
The column also alleges that Ten's attempts to renegotiate a new content deal with the Murdoch-controlled 21st Century Fox stalled until one hour after Ten was placed into voluntary administration.
Negotiating new content deals with CBS and 21st Century Fox was a crucial part of Ten's recovery plan to secure an extension or new loan facility. Ten had already negotiated a new deal with CBS, the column said, but 21st Century Fox was not returning calls until after administration proceedings had begun.
Yesterday, Ten said it was on track to increase earnings by $50 million in FY18 and $80 million by FY19 as well as save $34 million on license fee cuts over the same period, putting its balance sheet in a much stronger position to secure new financing. However, this was on the premise of 21st Century playing ball.
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Chanticleer said it had obtained the legal letter, which was served on behalf of Murdoch and Gordon's investment companies by law firm Fort Street Advisers.
The letter said Murdoch and Gordon were aware Ten would need to draw down up to $150 million on its current loan facility to by the end of this week to pay its bills, and that unless Ten could find alternative finance it would need to enter into voluntary administration.
If Ten failed to prevent a draw down on its current loan facility, “they will reserve their rights to pursue the statutory compensation rights they may have against you personally”, the letter is alleged to have stated.
Fort Street Advisers told AdNews it would not be commenting on any of the allegations or events leading up to Ten's administration.
AdNews was also told by Bruce Gordon's office that the WIN Corporation owner was overseas and could not be reached by the time this article was published.
Ten would not comment on the allegations and referred AdNews to its initial statement announcing it had entered into voluntary administration.
Within the statement there is a key paragraph that alludes to the legal letter.
“This decision follows correspondence received from (Murdoch's private investment fund) Illyria and (Gordon's private investment fund) Birketu over the weekend which left the directors with no choice but to appoint administrators.”
The allegations add weight to industry speculation that Murdoch and Gordon are clearing the decks for a potential bid for Ten if media ownership laws are relaxed. This could be as soon as by the end of the year.
If Ten had secured a new 21st Century Fox deal prior to administration, it would have placed the business in a healthy position to secure refinancing on its loan facility.
Without a reworked content deal and the threat of litigation from two of its largest shareholders, Ten's directors were left with little choice.
Yesterday, Murdoch and Gordon entered into a joint venture that they said will help Ten pay off its debts and restructure the business.
They also formed a voting bloc by combining their two shareholdings to form a 22% stake in the business. This allows the pair to avoid breaching ASIC rules on takeover bids because no shares have been swapped or acquired. The pair have stressed the move is not a takeover bid.
The future of Ten's ownership is pending on the government's ability to push through media reforms that relax media ownership rules.
If this passes, bets will be off on who Ten's next owners are likely to be.
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