Foxtel Bidder Identified, Nine & Seven Networks Rejected
The recent bidder for Foxtel has been exposed, as US cable television industry veteran Leo Hindery who also ran a ruler over the Seven and Nine Networks.
According to Foxtel archrival Nine Media Hindrey approached Rupert Murdoch’s News Corp and telecoms giant Telstra with a $S2.8 billion offer to buy the Foxtel network which has recently stripped costs while growing subscriptions.
The head of Investment Group InterMedia Partners which is based in New York was the bidder.
ChannelNews understands that a special purpose acquisition company (SPAC), Trine Acquisition Corp, is looking for an Australian media investment, the group also considered the acquisition of Kerry Stokes’ Seven West Media and Nine Entertainment Co and is still prepared to buy one of the TV Companies in an effort to get a foothold in the Australian media market. A SPAC is a publicly traded company that is made up with cash raised by investors and typically acquires or invests in unlisted companies.
Foxtel was the only one to receive an offer after the SPAC ran a ruler over the performance and potential of the Nine network that includes Stan and Seven West Media.
According to sources Foxtel was the only targeted Company that had any upside in the Australian market.
Foxtel is 65 per cent owned by News Corp and 35 per cent owned by Telstra and has recently benefitted from a lift in subscriptions across Foxtel, Kayo, and streaming service Binge. News Corporation wrote down the value of Foxtel by $1.4 billion last May and Telstra wrote off its shareholding by $300 million.
Foxtel’s total value is now $1.3 billion but could rise as movie Companies such as their US content provider HBO and Warner test the delivery of first run movies to streaming at the same time, they hit cinema’s.
According to sources both Telstra and News Corp are happy with the performance of Foxtel despite the business caring debt on their books.
The proposal would have left News Corp with a 30 per cent stake in Foxtel after buying out the Telstra shareholding.
Trine eventually invested in a manufacturer called Desktop Metal, which creates metal 3D printing technology according to Nine Media.
Mr Hindery formed Trine in March last year after decades of working in the media and telco industry. He was the founder of InterMedia Partners, a private equity firm focused on media industry investment. He also led Tele-Communications, a major US cable company that merged with AT&T in 1999 in a $US48 billion deal and The YES Network, a regional sports network, which is home to the New York Yankees. Mr Hindery raised about $US261 million in Trine’s initial public offering and intended to buy a company in the media or tech space.
News Corp CEO Robert Thomson last month there was no need to inject more cash into Foxtel. “We foresee no need to bolster Foxtel with extra investment, which shows that the business is on a particularly positive trajectory,” he said.