Oaktree pulls out of contest for Ten Network: sources

Bruce Gordon and Lachlan Murdoch remain the likely buyers of the Ten Network. Pic: Renee Nowytarger

Hedge fund Oaktree is believed to have pulled out of the contest to buy the Ten Network, sources have said.

It leaves Bruce Gordon and Lachlan Murdoch as the likely buyers of the network, which was placed in voluntary administration on June 14.

It also comes ahead of an Australian Competition and Consumer Commission decision due tomorrow on whether to clear any takeover.

Oaktree lobbed a joint bid for the company on Friday with fellow US hedge fund Anchorage Capital in competition with an offer from Ten’s shareholders Mr Gordon and Mr Murdoch.

However, sources understand that Mr Murdoch and Mr Gordon’s offer was more compelling and Oaktree and Anchorage may now have walked away for now.

The offer from Mr Murdoch, who is News Corp co-chairman, and Mr Gordon, who owns Win Television, was believed to be either conditional on a change in the media laws or one where part of the deal was funded with convertible notes that would give the pair an economic interest and be swapped into equity should a relaxation in the media laws occur at a later stage.

It is thought that the pair may have offered close to $250 million for the business, some of which would be paid for through the $40m they are owed as secured creditors, given they guaranteed a $200m loan to the Commonwealth Bank of Australia that expires at the end of this year.

As well as overcoming hurdles surrounding the media laws, the pair will also have to appease the ACCC.

The thinking is that the plan by Mr Murdoch for Ten is to feed content into the free-to-air broadcaster from News Corp’s newly-acquired Sky News and jointly bid for sporting rights with pay television provider Foxtel, which News Corp partly owns, and Fox Sports.

One issue is whether Ten will remain in receivership for an extended period of time should Mr Murdoch and Mr Gordon’s offer for the company not be accepted.

However, many say that the challenge for this outcome is that the media company needs $250m to refinance its debt to continue.

Should the sales process run through receiver PPB and advisers Moelis and KordaMentha not attract any buyers, Ten would likely be placed in liquidation.

Lachlan Murdoch and Mr Gordon have been seen as the most obvious buyers of the channel that broadcasts shows such as Survivor, Master Chef, The Project and I’m a Celebrity Get Me Out Of Here.

Oaktree has been advised by Credit Suisse, which did not comment on the speculation.