ASX probes PBL media sale

MINORITY shareholders in James Packer's Publishing and Broadcasting Ltd may yet get a chance to vote on the sale of a majority stake in one of Australia's biggest media empires, as the Australian Stock Exchange investigates the apparent change in control of PBL Media, which owns the Nine Network and ACP Magazines.

MINORITY shareholders in James Packer's Publishing and Broadcasting Ltd may yet get a chance to vote on the sale of a majority stake in one of Australia's biggest media empires, as the Australian Stock Exchange investigates the apparent change in control of PBL Media, which owns the Nine Network and ACP Magazines.

PBL was not required to seek shareholder approval for the sale of a half-share of PBL Media to private equity group CVC Asia Pacific in a $5.5 billion deal last year, because PBL retained management and board control of the new joint venture.

That, and a similar approval given to Seven Network for the sale of a half-share to Kohlberg Kravis Roberts, means minority shareholders have had no say in the sale of Australia's two most successful television networks.

But the sale by PBL of a further 25 per cent stake to CVC earlier this month has reduced PBL to a 25 per cent holding and just two board seats at PBL Media, prompting the ASX to investigate whether shareholders should be asked to consider the deal.

At the time of the CVC deal PBL had three main businesses - Nine, ACP and the casino business - but earnings from gaming were just over half of the group total.

ASX head of corporate affairs Matthew Gibbs told The Australian the bourse was examining Chapter 11 of the ASX listing rules - which refers to the need for shareholder approval when a company engages in significant transactions involving changes to core activities - in relation to PBL.

"Now that details of the transaction have been made known to the market, the ASX, in the normal course of supervision, is considering how Chapter 11 of the listing rules might apply," Mr Gibbs said.

He added that at this point, "no determination" had been made on how Chapter 11 might apply.

One relevant paragraph of the listing rules states that if a significant change of ownership "involves an entity disposing of its main undertaking, the entity must get the approval of holders of its ordinary securities and must comply with any requirements of ASX in relation to the notice of meeting."

The issue of whether PBL has now disposed of its main undertaking is likely to be at the heart of the ASX inquiries.

A separate part of Chapter 11 of the ASX rules suggests shareholder approval may be required if a listed company proposes to make a significant change to the nature and scale of its activities.

PBL is currently in the midst of a massive reorganisation, with a proposal to split the parent company into separately listed gaming and media investment holding companies.

The Australian revealed yesterday PBL was in the process of cutting staff numbers in its head office - the combination of the company's upcoming split and the sell-down of its media assets lessening the need for some of its personnel in the area.

Some executives working in the media side of the operations may now go, while others will be redeployed into the company's gaming operations.

Some of the staff changes are motivated by the fact that the new media company created out of the split - Consolidated Media - will now become predominantly a holding vehicle for PBL's media assets in the wake of the PBL Media sell-down.