BREAKING NEWS: Foxtel Buys Into Ten Deal Confirmed
Early this morning the Ten network confirmed a capital raising of up to $154 million, in which Foxtel will take up to $77 million worth of issue shares at 15 cents per share, or about 15 per cent of the company.
The proposal will also see Ten shareholders given the chance to take part in a further $77 million raising at the same price per share as Foxtel.
Ten’s billionaire shareholders, Gina Rinehart, James Packer and Lachlan Murdoch, through their associated entities, intend to subscribe for their entitlements in the raising – which will represent around 28 per cent of the total shares to be issued.
As part of the deal, Ten, the home of MasterChef, I’m a Celebrity…Get Me Out Of Here and Shark Tank, will become a 24.99 per cent shareholder in Multi Channel Network – Foxtel’s $500 million advertising business.
An analyst press briefing is set to take place at 10.30am.
“This proposal will drive value for all of Ten’s shareholders,” Executive Chairman Hamish McLennan said in the statement. “Ten’s ratings and revenue performance has materially improved this year.”
The free-to-air network will also sell new shares in a separate $77m capital raising at the same price as the issue of shares to Foxtel in a renounceable entitlement offer.
It’s understood at least three of Ten’s major shareholders will participate in the capital raising including Lachlan Murdoch, James Packer and Gina Rinehart.
The new capital will be used to reduce debt and provide much needed funds for programming and other investments.
Ten has appointed pay-TV sales house Multi Channel Network to sell advertising on its behalf in a bid to gain more heft in the free-to-air television market, which is dominated by the Seven and Nine networks.
The move will see Ten become a shareholder in MCN, taking a 24.99 per cent stake. MCN represents Foxtel in negotiations with advertisers and agencies.
The broadcaster will also join Foxtel’s subscription video on-demand service Presto, a joint venture between Foxtel and Seven.
Ten chairman and chief executive Hamish McLennan said: “Today’s announcement represents an important milestone for Ten and the conclusion of the strategic review process initiated by the Board last year.
“It positions Ten to drive long-term value for shareholders. The board believes the agreements with Foxtel and MCN will materially enhance Ten’s business and better equip it to respond to the challenges of the ever-changing media and advertising landscape.
“We welcome Foxtel’s proposed investment and we are confident this proposal will drive value for all of Ten’s shareholders.
“By joining forces with MCN, Ten will gain new efficiencies, improved data capability and provide broader integration opportunities for its advertising clients.
“The combined sales operation will provide advertisers a new way to reach consumers across all video content distribution platforms.”
Foxtel CEO Richard Freudenstein, said: “We believe our proposed investment in Ten is a win-win for Ten and Foxtel.