The Australian Compeition and Consumer Commission (ACCC), is investigating whether a Lachlan Murdoch-led plan to take over commercial channel Ten is legal.
Murdoch and fellow Network Ten Holdings shareholder Bruce Gordon yesterday signalled they were planning to take over the business, a month after pooling their respective stakes together.
Ten is currently in receivership after Murdoch, Gordon and James Packer declined to refinance the operation.
They have given an A$30 million (US$22.9 million) package to keep the business running until August 31, at which point receiver PPB Advisory hopes a new deal or owners will be in place.
Murdoch and Gordon referred their own takeover plan to the ACCC yesterday after confirming they were using their investment vehicles, Illyria and Birketu respectively, to launch a bid.
Birketu owns 15% of Ten shares, while Murdoch, son of media mogul Rupert Murdoch, owns 7.5%. The combined stake pushes them over the threshold at which a takeover bid should be triggered.
However, current Australia laws forbid media owners to have assets in radio, newspapers and television in one licence area at the same time.
Many expect the Australian government to repeal the so-called ‘two-out-of-three’ law in August, though opposition parties have reservations.
Murdoch already has radio and newspaper assets where Ten broadcasts. He is also is attached to Ten shareholder Foxtel through his father’s ownership of News Corp.
Gordon, meanwhile, is the owner of regional broadcaster WIN, and current ‘reach’ laws prohibit any one network from broadcasting to more than 75% of the population.
Owning Ten would put him past this threshold by hoovering up viewers in metropolitan areas.
“While this transaction is dependent upon the passage of the media reform bill, it is appropriate that the ACCC begin its review of the proposed transaction that has been put to us by the parties,” said ACCC chairman Rod Sims.
“The ACCC will assess the potential effect upon advertisers and upon competition within free-to-air television and between free-to-air television and Foxtel, particularly in relation to sport, given the holdings of the main players involved.”
According to local media, other potential buyers of the commercial network, Australia’s third largest, include CBS Corp., which has a major output deal with Ten that is a factor in the latter’s recent financial woes.