Gordon, Murdoch lob new Ten bid

The battle for control of Ten Network is hotting up after Bruce Gordon and Lachlan Murdoch tabled a sweetened bid.

Bruce Gordon and Lachlan Murdoch have made a revised bid for Ten

The battle for control of Ten Network has taken a new twist after Bruce Gordon and Lachlan Murdoch upped the ante by tabling a revised bid on more “compelling” terms.

The move, prompted by the passing of the media reform bill, will test the resolve of Ten’s administrators KordaMentha after they backed a rival offer by US media giant CBS that now offers a lower return to creditors.

Less than 24 hours after the Turnbull government pulled off the near-impossible task of scrapping some of Australia’s decades-old media rules, Mr Gordon and Mr Murdoch lobbed a new proposal that could open a bidding war if CBS counters the offer.

At lunchtime yesterday, corporate advisers Fort Street sent KordaMentha a five-page letter outlining Mr Gordon and Mr Murdoch’s latest attempt to take control of Ten, home of reality franchise MasterChef and the Big Bash cricket league.

“With the passage of the media reform bill now assured, there are limited conditions to the revised proposal and a single execution path,” Fort Street Advisory wrote to KordaMentha partner Mark Korda.

Under the revised terms, the maximum payment to unsecured creditors has increased by 57 per cent from $35 million to $55m, compared with $32m from CBS.

The revised bid is 72 per cent higher than the proposed payment under the CBS bid. In aggregate, Ten’s unsecured creditors, excluding CBS, will receive 13.4c in the dollar compared with 12.43c under the CBS deal.

The investment companies of Mr Murdoch and Mr Gordon, Illyria and Birketu, employees and continuing trade creditors would receive 100c in the dollar and all other creditors would get 5.75c in the dollar.

WEB Business Ten unsecured creditors

Ten will no longer be burdened by a contract with CBS that KordaMentha’s official report describes as “onerous”, the letter states. It remains unclear if the revised offer will be put to creditors at the second meeting of Ten’s creditors, which is due to be held in Sydney on Tuesday, when they will vote on the CBS bid.

KordaMentha is said to be seeking advice on whether a new bid could be accepted.

CBS, which is based in New York, did not respond to a media inquiry at the time of writing.

Under the new structure, Mr Gordon and Mr Murdoch will allow shareholders to keep 25 per cent of their equity, with Ten to be relisted on the ASX.

This will enable Ten’s 17,000 shareholders to share in any recovery under Mr Murdoch and Mr Gordon. Under the CBS bid, the US company will own 100 per cent of the company.

Under the CBS deal, retail shareholders would get nothing for their stock, which prompted concerns from the Australian Shareholders Association and talk of a class action by disgruntled shareholders.

The Gordon and Murdoch deed of company arrangement provides sufficient funds that would see Ten continue operating and meet the obligations to staff.

With the media laws soon to complete their passage through parliament and other conditions removed, the new bid from Mr Gordon and Mr Murdoch had no execution risk, sources said.

Ten would also remained locally owned and operated, with Gordon and Murdoch committed to increasing Australian content output.

On another day of high drama, KordaMentha did not disclose the revised Fort Street letter to the ASX until about six hours after the letter was received by the administrators, a delay that triggered a complaint by Mr Gordon’s lawyer and adviser, John Atanaskovic.

In an email seen by The Weekend Australian, Mr Atanaskovic sent the offer letter directly to the ASX’s senior adviser, listings compliance, Belinda Chiu.

“Ten has (at best) had a checkered record of compliance with its continuous disclosure obligations as a listed entity since it went into administration,” Mr Atanaskovic wrote to Ms Chiu.

“So I am sending you the attached letter in order that you raise with Ten the disclosure of the letter by Ten through the ASX, if not even for the ASX to arrange its disclosure on the ASX announcements platform.”

In response, a spokesman for KordaMentha said: “Appropriate communications will be made at the appropriate time.”

Earlier this week, KordaMentha was forced to defend its actions during Ten’s receivership in the NSW Supreme Court. Among other accusations, it was alleged that Ten’s creditors were “left wholly in the dark” about the value of Mr Gordon and Mr Murdoch’s previous bid.

Lawyers for Mr Gordon argued that neither the original report by KordaMentha nor a supplementary report to address deficiencies in the first one supplied any material as to the effective value of the transaction.

Mr Gordon is seeking a court declaration that KordaMentha failed to give creditors adequate information about his joint bid with Mr Murdoch because the official report was deficient in several respects.

Justice Ashley Black is due to hand down a judgment on Monday.

The court action was brought last week by Ten affiliate WIN Corporation, owned by Mr Gordon. 21st Century Fox joined WIN as a plaintiff in the court action as a program supplier to Ten.