After Bruce Gordon (via his companies WIN Corp and Birketu) launched an urgent case with the NSW Supreme Court last week, Channel Ten’s administrators have provided further information about why it chose to sell the network to US behemoth CBS, rather than accept other offers, such as the Gordon-Murdoch bid.
Mr Gordon’s primary argument was that the administrator’s credit report “fails to include adequate information” about Gordon-Murdoch’s competing bid.
Whilst the first stage of Gordon’s legal action has postponed the next creditors meeting to September 19th, administrators KordaMentha still maintain that its second creditors’ report “was both compliant and provided the necessary and material information required by creditors to make an informed decision on the future of the Ten Network”.
KordaMentha partner, Mark Korda, states that the primary considerations when comparing the offers included; financial returns to creditors, “complexity and risks” and the “timeframe for completion”.
Administrators state that the CBS proposal was a “superior” deal for creditors when comparing the financials between both bids. The information was released in a report on Monday.
While the Gordon-Murdoch deal (via their companies Illyria and Birketu) would return 27.6 million (or 10.58 cents in the dollar) to creditors, CBS would return $32 million (or 12.43c in the dollar).
Regarding the conditions of both deals, administrators deemed that “the CBS transaction was more certain as it had a lower execution risk”.
CBS holds an advantage over the Gordon-Murdoch deal, in that it can acquire Network Ten without needing to wait for Australian media laws to be amended.
Mr Gordon and Mr Murdoch are prevented from taking over Network Ten under current media guidelines, which states an individual/company can only own “two out of three”, being a newspaper, TV station and radio station in the same licence area. The duo are waiting on the Federal Government to pass the Media Law Reform Bill, which is set to abolish the “two out of three rule”, and the remove regulation which prevents a single TV broadcaster from reaching more than 75% of the Australian population.
Speaking of Mr Gordan’s recent court action requesting further information on his under bid, KordaMetha states:
“It is disappointing that Birketu [Mr Gordon’s company] either directly or via related parties have pursued court action, delaying the creditors vote and putting at risk the certainty provided to 750 employees and creditors under the CBS transaction”.
The Supreme Court of NSW is poised to hear the matter continue on Tuesday and Wednesday.
