Australian paycaster Foxtel is closing in on a 14.9% stake in commercial free-to-air rival Network Ten, according to a local report.
Fairfax Media reports 21st Century Fox-backed Foxtel will invest around A$85 million (US$66.4 million) at 18¢ a share in Network Ten Holdings, which operates the embattled Ten.
Following Fairfax’s story, ASX-listed Ten issued a statement confirming talks, while adding its wider strategic review process continued. “One component of that process involves discussions with Foxtel about the terms on which it may potentially invest in Ten,” said Ten.
This comes amid what has been described as growing pressure on Ten to announce a deal before its full-year financial results tomorrow.
Providing Foxtel does not buy more than 15% of Ten, a deal would not need shareholder approval.
Should Foxtel end up with the 14.9% stake, it is likely it will push through programming and advertising tie-up agreements between the broadcasters.
Ten may follow a Foxtel deal by launching a general offer to shareholders at the same price in order to raise around A$100 million more, Fairfax reported.
Foxtel has been chasing a stake in the business since it was put up for sale last year, but was unable to buy out the broadcaster completely after its previous bid partner, Discovery Communications, pulled out after protracted talks.
Various groups, including Saban Capital, have explored buying Ten, whose shareholders include mining magnate Gina Rinehart, James Packer, Lachlan Murdoch, Lazard Asset Management and Bruce Gordon.
The latter, owner of regional broadcaster WIN, was instrumental in causing the Discovery-Foxtel deal to fail, as he is keen on the broadcaster remaining in Australian hands.
He is also thought to be keen on taking control himself and merging Ten with WIN, though this scenario would rely on Australia media ownership regulations changing.