Murdoch in $2 billion bid to expand media empire
The Australian arm of Rupert Murdoch's News Corp. has put in a $2 billion bid for pay TV company Consolidated Media Holdings. If successful, Murdoch would take control of a large slice of Australia's pay TV industry.
News Limited, the Australian branch of News Corp., offered $3.50 Australian dollars (2.81 euros) on Wednesday for each share of rival tycoon James Packer's majority-owned media firm, which is valued at AU$1.97 billion.
The deal would give the company a 50 percent stake in Australia's biggest pay TV operator, Foxtel, and full ownership of Fox Sports. The Consolidated Media Holdings (CMH) share price rose by almost 10 percent higher as news of the deal broke.
It is, however, still subject to approval from the Australian competition watchdog and the Foreign Investment Review Board. The News Corp. board must also back the deal.
News Limited chief executive Kim Williams, the former head of Foxtel, told staff on Wednesday he will be "sharing his vision for News [Limited] as the company embarks on its next phase of growth."
The move was also supported by James Packer, whose Consolidated Press Holdings (CPH) owns half of Consolidated Media.
"CPH welcomes News' proposal and looks forward to Consolidated Media and News working together to address the detailed terms and conditions," said Packer.
If approved, it will be the first time in a century that the Packer family will have no media interests in the country, apart from a small stake in the Ten Network.
The bid came as News Limited announced major restructuring. The firm, which owns 70 percent of Australia's newspapers, said it wished to centralize its operations and reduce duplication.
Its key rival, Fairfax Media Limited, announced a major overhaul on Monday. An estimated 1,900 jobs are expected to be cut over three years and pay walls erected on two of its flagship online sites.