Ahead of the second creditors meeting scheduled for today, American broadcaster CBS has increased its offer, thereby directly taking on rival bidders Lachlan Murdoch and Bruce Gordon, who recently increased their offer too.
CBS’s revised offer is set to pay out unsecured creditors $40.58 million, which is a jump from $32 million outlined in its previous bid. Reports state the majority of the new funds will go to 21st Century Fox, a Murdoch family-owned company.
Under CBS’ latest offer, despite being a creditor to Channel Ten, the American broadcaster would not receive any of its money back. Funds to Fox would jump to $12 million (up from $3.4 million), and CBS would cancel its $5 million warranty on the creditors trust.
Both Gordon & Murdoch and CBS’ offer would see trade creditors receiving all their money back. Notably under Gordon/Murdoch’s offer all other creditors would receive 5.75 cents in the dollar.
CBS has offered financial creditors (e.g. the ATO and banks) 34 cents in the dollar, whilst others receive 10 cents.
KordaMethan administrator, Mark Korda, states that all creditors are now at least equal, or better off, with CBS’s revised proposal, as opposed to the rival Murdoch and Gordon offer.
Whilst CBS’ original bid was declared the winning bid by administrators KordaMentha, the new offer from Mr Gordon and Mr Murdoch was said to tempt creditors to delay the second creditors meeting, in order to provide time to consider the opposing offer.
The American broadcaster’s revised offer follows a court ruling which saw Mr Gordon losing his bid to block the sale of Channel Ten to CBS. Reports state Mr Gordon is expected to appeal.
Word is, The Court of Appeal could hear the appeal in late September or early October at the latest. A crucial element of the appeal would involve reducing the weight of, or totally eradicating CBS’s ability to vote for its own proposal.
CBS’s new offer could see creditors approve its new offer at its meeting today. Being a large creditor, CBS ensures it has the votes the approve the deal by value of debt voted.
Following this, CBS will need the support of Channel Ten’s 750 employees to approve the deal by creditors. Should there be an impasse, administrators KordaMentha will hold the deciding vote.
