Ukraine war, inflation and interest rates delay Foxtel IPO

The highly-anticipated public float of Foxtel has been delayed until later this year due to a range of domestic and international factors that have altered the media landscape.

Foxtel CEO Patrick Delany. It’s understood Foxtel is ready to proceed with a public float – should it opt to do so – once market conditions improve. Picture: Ryan Osland

The highly anticipated public float of Foxtel has been delayed until later this year due to a range of domestic and international factors that have altered the media landscape in recent months.

Despite widespread industry speculation that an announcement regarding the timing of the float would be made by the end of this month – with a view to a possible public listing of the company before the end of this financial year – the potential deal now won’t proceed until the second half of 2022.

Rising worldwide inflation, forecasts of multiple interest rate rises this year, and the ongoing war in Ukraine have all played a part in stalling the IPO, sources involved with the deal have told The Australian.

There are also concerns that the streaming market – both in Australia and overseas – has become worryingly overcrowded in recent months, which could make investors skittish.

However, it’s understood Foxtel is ready to proceed with a public float – should it opt to do so – once market conditions improve.

“When the (IPO) market opens, Foxtel will be well positioned to undertake an IPO,” one senior insider told The Australian.

It’s understood Foxtel has established the necessary regulatory and legal frameworks to launch the IPO, and a prospectus has also been finalised. Foxtel is hoping to raise $1bn when the IPO does eventually launch, The Australian has learned.

Industry figures have also observed the IPO market is “shut”, a view reinforced by recent figures from financial markets platform Dealogic which shows the issuance of IPOs in Australia so far this year totals just $200m – compared to $12.8bn in 2021, and $4.7bn in 2020.

Foxtel is Australia’s largest Australian-based subscription television provider, and in recent years has reinvented itself as a “technology-led streaming company” with the introduction of entertainment platform Binge, sports service Kayo, and Flash, a global news aggregator. Foxtel has more than four million subscribers across all its platforms and last year set out an ambitious strategy to aim for five million subscribers in the next three years. Kayo and Binge have more than one million subscribers each, with streaming subscribers now representing 56 per cent of the Foxtel Group’s total subscribers. In 2016, that number stood at just 8 per cent.

Earlier this year, Foxtel Group chief executive Patrick Delany told The Australian that any potential float was a matter for the company’s shareholders.

“Whether the owners (News Corp, publisher of The Australian, has a 65 per cent stake in Foxtel, with the remaining 35 per cent owned by Telstra) decide to offer part of it to the public, or whether we’re talking to debt markets about refinancing, or frankly, our own shareholders, we are building stable value,” he said.

“I think we can cope with whatever structure. It (a potential public listing) really is a matter for the shareholders.”

There are also strong suggestions in media circles that Telstra has already agreed to a deal to acquire video aggregator Fetch, with an announcement expected this week. A spokesman for Foxtel declined to comment on Sunday on the postponement of any potential public float of the company.

Originally published as Ukraine war, inflation and interest rates delay Foxtel IPO