James Packer was behind the on-market share raid of Ten Network Holdings Ltd, it has been confirmed, and the billionaire looks set to push for a seat on Ten’s board.
Analysts believe the AFL broadcasting rights are central to Mr Packer’s move on Ten shares, which also gives him a “foot in both camps” when the federal government makes its decision on changing rules which specify that some sporting events should be kept on free TV.
A substantial shareholder notice lodged with the Australian stock exchange after the market close on Wednesday showed Mr Packer had lifted his stake in the broadcaster to 17.88 per cent, from 16.48 per cent.
A substantial stake in Ten was snapped up after the market closed on Tuesday, when the buyer was unknown.
The two trades – which total 186.8 million shares – appear to have cost Mr Packer about $280 million.
Reports on Wednesday suggested Mr Packer had amassed a stake in Ten of 19.9 per cent – the threshold beyond which a takeover offer must be declared.
This may be the case, but may take some time to confirm.
Full takeover ‘unlikely’
Notices of substantial shareholding must be lodged within three trading days, the Australian Securities Exchange says.
Reports claim investment bank UBS plans to buy up to 20 per cent of Ten on Mr Packer’s behalf, enough to give him board representation, but a full takeover bid is unlikely at this stage.
Mr Packer, the deputy chairman of Consolidated Media Holdings Ltd, appears likely to push for a seat on the Ten board, analysts say.
Independent media analyst Peter Cox said Mr Packer may ratchet up his holding in Ten, saying the broadcaster needs “a bit of revitalisation” despite enjoying recent ratings success with MasterChef.
“Surely he would want to go to 50 per cent, get control of the network, be able to run it his way,” Mr Cox told the ABC.
“So I think you could be looking towards him wanting to build up that shareholding in the next year or two.”
Major Ten shareholder Perpetual would not comment on a Fairfax report claiming it had sold some of its shares in Ten to Mr Packer.
But the private investment vehicle of WIN Corporation owner Bruce Gordon, which holds a near 13 per cent stake in Ten, has no plans to sell off its investment, a WIN spokeswoman told AAP.
The move to multiple-channels on free-to-air television had been a game changer, Fat Prophets senior analyst Greg Fraser said.
“Perhaps he’s seen an opportunity to buy into Channel Ten at a point where it’s probably past the low point in the advertising revenue cycle – we’ve seen better numbers this year – but it’s nowhere near the top,” he told AAP.
‘A foot in both camps’
Analysts note that the Ten move has also come ahead of the federal government’s decision on anti-siphoning laws governing the broadcast of sporting events.
“I think this might be a matter of actually having a foot in both camps,” RMIT University academic and media commentator Vincent O’Donnell said.
Foxtel would benefit from an easing of anti-siphoning laws, but an expanded Ten in a multi-digital channel environment would benefit if that did not happen.
“Packer will gain on both sides,” Dr O’Donnell said.
CMC Markets institutional equities dealer Anthony Whitaker said it was rumoured that Mr Packer wanted to leverage Ten’s hold on the 18-to-39 age demographic, but was worried about costs associated with Ten’s soon-to-be-released digital channel Eleven.
Mr Packer may also favourably view Ten’s move to grab the more mature or news-thirsty audience with a two-and-a-half hour news segment each weeknight next year, CMC Markets analyst David Taylor said.
“With the medium term outlook for the commercial television market improving, it looks like a good play,” Mr Taylor said.
Ten shares closed up 13.5 cents, or 9.57 per cent, at $1.545.
en delivers its full year results on Thursday.