Foxtel and Discovery linked to joint bid for Ten

Pay TV operator Foxtel and channel operator Discovery are being widely linked to a move for Australian free-to-air broadcaster Ten Network.

Australian press reports cite sources close to the negotiations as saying Discovery and Foxtel are weighing a move for Ten, with News Corp and Telstra-owned Foxtel eyeing a 14.9% stake to avoid contravening cross-media ownership regulations.

AFR.com first revealed yesterday that Discovery had appointed Goldman Sachs to advise it on a transaction, and that Foxtel had called in long-time advisor Angus James from Aquasia.

The Australian reports say that Ten’s financial advisors have asked suitors to submit non-binding bids for the free-to-air operation with a late November deadline.

UK broadcaster ITV has also been linked to a deal, with Foxtel was also reported to have considered a joint venture bid with former Hulu co-owner Providence Equity Partners, though this was a non-starter.

Providence has also considered a joint venture offer with New York hedge fund Achorage Capital Group, while publisher Fairfax Media, which is launching streaming service Stan with Nine, was reported to have met with Ten executives but was not tempted by a deal.

AFR sources indiciated that though the Discovery-Foxtel venture was the frontrunner for Australia’s third-largest network, there was no guarantee a bid would be placed. “Price is going to be the deciding factor – not structure,” said a source.

Ten has issued downbeat financial forecasts this year, amid a lacklustre ratings performance, and said TV revenues will decrease as programming costs rise. Earlier this year it introduced a cost reduction plan.

With its share price suffering in the wake of the poor performance, several media companies have been linked to a takeover of the struggling broadcaster.