Ten Network creditors back CBS takeover bid

Ten creditors have voted in favour of a sweetened bid by CBS, which is now poised to seal ownership of the network.

Investors and other interested parties at the Ten creditors meeting. Pic: AAP

A meeting of Ten Network creditors has voted “overwhelmingly” in favour of a bid for the network by US entertainment giant CBS, which overnight sweetened its takeover offer.

CBS had lifted its bid in answer to an updated offer from rivals Bruce Gordon and Lachlan Murdoch, which creditors today rejected.

“I’m not an industry expert — you guys probably all know better than me — but I think the industry is genuinely excited about having a $27 billion big brother looking after Channel 10,” administrator Mark Korda said after the meeting.

Ten receiver and manager Christopher Hill said the outcome secured the future of Australia’s third largest free-to-air broadcaster.

“We believe the approval of CBS’s DOCA (deed of company arrangement) represents a positive outcome for creditors, and ensures the iconic broadcaster continues on a strong and stable footing under the ownership of one of the world’s largest media organisations,” said Mr Hill, a partner at PPB Advisory.

KordaMentha, which earlier favoured the initial CBS bid for Ten, said the CBS deal was expected to be finalised in weeks, subject to Foreign Investment Review Board approval.

“It’s business as usual for employees, business as usual for programmers and the transaction should be completed in four to five weeks,” said Mr Korda.

Today’s meeting in Sydney was called to consider the competing, revised, bids, leaving it for creditors to decide on the outcome of the free-to-air network.

There was speculation the meeting might be delayed after last night’s new CBS offer to unsecured creditors, which was lifted from $32 million to more than $40 million.

But creditors voted not to adjourn the meeting. An adjournment would have enabled a vote on the Gordon and Murdoch bid.

Counting votes following a vote on CBS bid at meeting of Ten Network's creditors https://t.co/mimYlNQ9xH pic.twitter.com/kcus5eK3TA

— Darren Davidson (@darrendavidson) September 19, 2017

Mr Korda said creditors “have voted for a future for Ten with CBS”.

“There was a meeting of the Ten creditors today, and the creditors have decided on the future of Ten,” he said. “What they have decided was to vote more than 50 per cent in value and 50 per cent in number to accept a CBS deed of company arrangement.

“The creditors were given an opportunity to adjourn the meeting, they decided they did not want to adjourn the meeting.”

Present at the meeting was Ten chief executive Paul Anderson, who is expected to continue leading the network under CBS.

CBS and the group representing Ten employees were set to be pivotal in today’s meeting. Combined, they had the numbers to carry a vote. Any deal needed the support of the largest value in terms of creditors (CBS) and the most number of votes, which is Ten’s 750 Ten staff.

Today’s creditors meeting came as Mr Gordon delayed a potential challenge to yesterday’s NSW Supreme Court rejection of his protests against the CBS bid.

Today’s vote and CBS’s new offer marked yet another twist in the battle for Ten, home of MasterChef, The Bachelor and the Big Bash cricket league, which was placed into receivership earlier this year.

The US entertainment giant’s new offer will see Ten’s trade creditors receive $40 million.

Under the previous CBS offer, trade creditors were to receive $32m, including $3.4m to US network Fox if its ongoing contract for television content was not renegotiated.

Under the latest offer CBS, which itself is a creditor as a provider of content to Ten, will not receive any of its money back. The payout to Fox will increase to $12 million, from $3.4 million, and CBS will cancel its warranty of $5 million on the creditors trust.

Under both the Murdoch and Gordon offer and the CBS offer, trade creditors would receive all of their money back, but all other creditors under the Murdoch and Gordon offer would receive 5.75c in the dollar.

CBS will offer financial creditors such as the tax office and other banks 34c in the dollar, while others get 10c.

The changes, according to Mr Korda, meant all creditors were now at least equal, or better off, with the CBS deal, compared to the rival Murdoch and Gordon bid.

On Friday, Mr Gordon and Mr Murdoch made a new bid to Ten’s administrators, offering the broadcaster’s unsecured creditors up to $55 million, which includes a CBS payout, compared to the $32 million offered by CBS.

In another development, Mr Gordon delayed a potential appeal against yesterday’s NSW Supreme Court ruling against him and Mr Murdoch in the Ten administration case.

Justice Ashley Black yesterday dismissed legal action brought by Mr Gordon and Mr Murdoch against KordaMentha. The would-be buyers had argued their bid wasn’t properly considered by KordaMentha when the administrators decided in favour of CBS.

Justice Black also ordered that today’s meeting should be able to go ahead as planned. He further stopped Mr Gordon’s attempts to stop CBS from voting at the meeting, where it will be the largest creditor by value with $348m in debt.

Mr Gordon was due to lodge an appeal in court this morning but he delayed this move in the knowledge that he has time to lodge the appeal after a creditors’ vote.

Mr Gordon and Mr Murdoch are still considering challenging any deal with CBS in the next round, which is a NSW Supreme Court hearing to approve the deed of company arrangement and transfer of shareholder interests to creditors.

Mr Murdoch was not a party to the appeal and both sides are considering their positions for the next round.

Mr Murdoch is co-chairman of News Corp, which is publisher of The Australian.

With Bridget Carter