SYDNEY: Australia’s competition regulator said Thursday it would not oppose a US$2.0 billion takeover bid by Rupert Murdoch’s News Corporation for rival Consolidated Media Holdings (CMH).
The Australian Competition and Consumer Commission (ACCC) said the purchase, aimed at boosting News Corp’s pay-TV presence in Australia, was “unlikely to lead to a substantial lessening of competition in any relevant market”.
CMH is a media investment firm focused on subscription television, and if the deal goes ahead News Corp will emerge with 50 percent of Foxtel, the country’s biggest pay TV operator, and all of Fox Sports.
Telecoms giant Telstra owns the other half of Foxtel.
ACCC approval of the 100 percent buyout was one of the deal’s major hurdles.
It still needs the nod from Australian casino mogul James Packer’s Consolidated Press Holdings, which owns 50 percent of CMH, and 24 percent stakeholder Seven Group Holdings. The remainder is held by retail shareholders and institutions.
Packer has previously welcomed the A$3.50-per-share bid as “fair”, while Seven — majority owner of Australia’s most popular free-to-air television network — has asked the ACCC to consider its own counter-bid for CMH.
If the sale goes ahead, it will be the first time in a century that the Packer family will have no media interests in Australia, apart from a small stake in the Ten Network.
ACCC chairman Rod Sims said the regulator had noted that News Corp already owned 50 percent of Fox Sports but had “no interests in other free-to-air or subscription television entities in Australia”.
“The ACCC considered that the proposed acquisition was unlikely to materially change News Corporation’s incentives in relation to the supply of content in Australia,” he said.
Sims added the ACCC “continued to assess the proposed acquisition of 100 percent of the shares in CMH by Seven Group Holdings”.
The bid follows the failure of Murdoch-linked Sky News to win the government-funded Australia Network TV contract last year, with Canberra abruptly ending the tender process and awarding it to public broadcaster ABC.
The government in April reached a confidential settlement with News Corp, reportedly worth A$2 million, over the aborted tender.
News Corp’s Australian franchise, News Limited, recently unveiled a major revamp to its operations, merging its print and digital businesses with an unspecified number of job losses.
News Limited controls 70 percent of the country’s newspapers and has a stake in Sky News. It has been hit by advertisers and readers migrating from print to the Internet
Channel News Asia