Network Ten Buys Into Presto, As Foxtel Looks To Scoop 15% Of Ten Network
Network Ten is tipped to announce the Foxtel investment shortly, according to News Corporation publication The Australian. News Corporation own 50% of Foxtel while Telstra own the other 50%.
Any deal for more than 15 per cent of Ten’s equity would require shareholder approval, which means Foxtel’s bid cannot be blocked by media mogul Bruce Gordon, who has thwarted previous proposals submitted to Ten’s Independent Board Committee.
Network Ten took a non-cash write down of $251.2m as the loss for the six months to February 28 deepened from the $8m loss reported for the same period a year earlier.
Stripping out the one-off impairment charge, earnings before interest, taxes, depreciation and amortisation dropped 26 per cent to $7.5m because of a 1.7 per cent fall in television revenue, which amounted to $309.8m.
Shares in Ten gained 6 per cent at the close on Friday, up 1.5c to 26.5c, as the company’s stock bounced back from recent lows.
Network Ten has also bought into the struggling Presto, which is Foxtel and Seven’s joint venture streaming video-on-demand operation.
Ten has taken a 10 per cent share of Presto, valued at $5 million, but its buy-in also includes advertising and licensing product.
There was a handshake agreement to take part at the beginning of the venture but Ten held off until the network saw im?provements in its ratings and ad revenue.
The problem for Foxtel is that the investment could still be stopped by the Australian Competition & Consumer Commission who have already taken a close interest in the deal.
In December, lawyers acting for Foxtel contacted the Australian Competition & Consumer Commission over a $590 million joint bid with US cable operator Discovery Communications.
Amid resistance from Mr Gordon, Ten’s largest shareholder and owner of regional television broadcaster WIN Corporation, Discovery walked away from the auction, leaving Foxtel as a sole bidder.