ACCC to monitor Ten takeover bid

THE competition regulator will announce this week it is moni­toring Foxtel’s $590m joint takeover bid for Ten Network.

THE competition regulator will announce this week it is moni­toring Foxtel’s $590 million joint takeover bid for Ten Network as the company board continues to assess several proposals.

Australian Competition and Consumer Commission chairman Rod Sims told The Australian the regulator would issue a notification on its website after Foxtel flagged a proposal to ­purchase a 14.9 per cent stake in Ten.

“We’re aware of it and we’re monitoring the situation,” Mr Sims said, adding there were no plans as yet to open a formal ­investigation.

It comes as sources close to the discussions said an independent committee considering the proposals with Ten’s adviser Citigroup was not expected to make a recommendation this week.

While the ACCC notification does not mean the regulator will intervene in the proposed takeover, it signals the high-profile nature of the deal and the possibility that Foxtel may need to convince the regulator any issues can be managed.

Although Ten has received non-binding, conditional pro­posals from a number of parties which could result in a change of control of Ten or a refinancing of its existing debt facilities, it has cautioned the sale process may not result in a transaction.

With technology changing competition so rapidly, the ACCC may determine that ­Foxtel having a stake in Ten makes little difference to any competition between the free-to-air and pay-TV markets.

While clearing the $2 billion Foxtel-Austar merger in 2012, the ACCC found that the real competition for Foxtel in the future will be IPTV. The IPTV threat is more real than ever, with US streaming giant Netflix preparing to launch in March, and Nine Entertainment Co set to join the fray next year.

Although Mr Sims has not declared his position, he has said he will revisit a ­previous ruling. In 2012, he stopped media mogul Kerry Stokes taking full control of James Packer’s ­­pay-TV vehicle Consolidated Media.

It comes as US-based special acquisition company Silver Eagle emerges as a new entrant in the battle for the Ten. Silver Eagle’s interest relates to a debt recapitalisation rather than a full bid. The company is run by former MGM chairman Harry Sloan and former CBS boss Jeff Sagansky.

Others bidders for Ten ­include Anchorage Capital and Haim Saban from Saban Capital.

Deutsche Bank analyst Ent­cho Raykovski said the “most likely offer” was the joint bid by Foxtel and US cable operator Discovery Communications.

“We can see the rationale behind a Discovery-Foxtel consortium operating Ten, with Dis­covery obtaining a distribution platform into Australia and Foxtel potentially gaining closer alignment to an FTA network,” he said.

Foxtel is jointly owned by News Corp, publisher of The ­Australian, and Telstra, both holding 50 per cent shares.