US executives behind ‘blank cheque’ bid for Foxtel to search Australia again

The US cable TV veteran behind a $US2 billion ($2.6 billion) offer for Foxtel will cast an eye over the Australian media and telecommunications industry for the second time in a year as he prepares to list his second “blank cheque” company on the New York stock exchange.

Leo Hindery, the American businessman who offered to buy the Rupert Murdoch-controlled pay TV operator mid-last year, is planning to look over several local media and technology assets in a renewed attempt to invest in the Australian market through a special purpose acquisition company (SPAC).

SPACs have been phenomenally successful in the United States, with approximately $US72 billion raised so far this year.Credit:

Sources close to the plans who could not speak publicly for confidentiality reasons said Mr Hindery’s soon-to-launch SPAC, Trine Acquisition Corp II, was planning to speak to several local companies again, a move that could lead to a second offer for Foxtel or taking closer look at Nine Entertainment’s streaming business Stan. A spokesperson for Trine Acquisition Corp II declined to comment.

It is unclear which specific companies the new SPAC may look at, but will be privately owned and focused on the technology, media, and telecom industry. The SPAC is expected to list on the New York stock exchange in early April.

A SPAC is a publicly traded company with no operations or assets and is instead made up of cash raised by investors. It is built with the intention of acquiring or investing in another unlisted companies and allows retail investors who invest with the SPAC to get exposure to private equity style transactions. Mr Hindery, who runs US private equity firm InterMedia Partners, launched its first SPAC, Trine Acquisition Corp, last year and used the money to buy 3D printing technology company Desktop Metal in August in a deal that valued the company at about $US2.5 billion.

Before it bought Desktop Metal, the first Trine SPAC approached News Corp with a $US2 billion offer to invest in Foxtel, by acquiring a major stake in the pay TV provider while paying out a large amount of the company’s $2.1 billion debt pile. The proposal would have left Telstra without a stake in the company (Telstra currently owns 35 percent of Foxtel).

It is unclear why Foxtel rejected the offer, but some sources indicated the offer was below News Corp’s valuation of the asset. The rejection of the offer was also considered a reflection of the local market’s inexperience with SPACs.

Mr Hindery’s first SPAC also briefly considered approaching Kerry Stokes’ Seven West Media and Nine Entertainment Co – the owner of this masthead – last year. However, Foxtel was the only one to receive an offer.

One of the directors on the board of the first Trine SPAC is Josephine Linden, a former partner at Goldman Sachs who has previously made investment decisions for former Prime Minister Malcolm Turnbull. Industry sources familiar with the first Trine vehicle’s plans said Ms Linden previously put forward several ideas on where to invest in the local market. She is expected to be involved in the second SPAC as a director.

SPAC issuances have become increasingly common in the US. Pitchbook data from 2020 revealed that $US39 billion was raised through the vehicles and, in January, there were 60 listings that raised nearly $US26 billion. SPACs are not allowed to list in Australia, after the ASX rule out jumping on the bandwagon in early February.

“We have had approaches from parties about our preparedness to consider changing or waiving our anti-cash-box rules to facilitate SPAC transactions,” ASX executive general manager of listings and issuer services Max Cunningham said. “The ASX is examining the SPAC phenomenon closely. Our focus is on achieving the best outcome for the Australian market and for local investors.”