Discovery/Foxtel bid among Ten offers

Network Ten in Australia has confirmed it has received “non-binding, conditional proposals” relating to a company takeover – likely including one from Discovery Communications and Foxtel.

Any of these could result in “change of control of Ten or a refinancing of its existing debt facilities”, the firm said in a note to the Australian Stock Exchange.

An independent board committee will now study the proposals in conjunction with adviser Citigroup, with Ten ready to update the ASX when “required to do so under its continuous disclosure obligations”.

The offer from Discovery Communications and Foxtel – which would see the former the 85% and latter the remaining 15% – is thought to be leading the race to acquire Ten Networks Holdings.

This is despite local Australian reports revealing a previous indicative offer of A26¢ (US22¢) a share had been cut to a non-indicative cash and shares bid of between A20¢ and A25¢ each.

The offer is thought to have a duel-class structure in a bid to persuade Ten shareholder Bruce Gordon, who had misgivings about a deal, to sell.

This is thought to have eased his concerns. Yesterday, his board representative, Paul Mallam, resigned from Ten.

According to the Sydney Morning Herald, Discovery and Foxtel lowered their bid as they troubled about some of the information they received at recent management presentations and wereconcerned about the health of the struggling company, which has been hit by low ratings.

Other firms linked to Ten include Time Warner, which is now thought to be out of the running, former Hulu part-owner Providence Equity Partners, New York-based hedge fund Anchorage Capital Group, and Haim Saban’s LA-based media investor, Saban Capital.

Unusually, Ten’s stock price dropped 6.25% upon announcement of the offers.