Sunraysia knocks back WIN offer

BRUCE Gordon's WIN Television yesterday attacked a move by Sunraysia Television - the owner of Channel 9 in Perth - to reject a $146.2 million offer for the station.

BRUCE Gordon's WIN Television yesterday attacked a move by Sunraysia Television - the owner of Channel 9 in Perth - to reject a $146.2 million offer for the station.

Sunraysia said in a statement that its directors' "continued to recommend" a $136 million offer by James Packer's PBL Media - despite the fact it was $10 million lower than the WIN bid.

WIN's George Papadopoulos, managing director of the privately owned regional TV network, told The Australian last night: "We offered $10 million more, and they don't seem to want it. I guess we'll have to try and understand why they don't want it over the weekend."

The rejection could lead to a new low in already-strained relations between WIN and the Sunraysia board.

Sunraysia directors offered an array of explanations for not accepting WIN's offer, including the fact that "while the WIN offer was, on its face, approximately $10 million higher ... the proceeds of the WIN offer purchase price potentially available for distribution to shareholders would not equate to an additional $10 million".

Sunraysia outlined several factors that it claimed would eat into the extra amount WIN was willing to pay, including a $1.36 million break fee that would be payable to PBL Media and additional liabilities, including additional legal fees.

Mr Papadopoulos refused to comment any further on the deal.

However, one possible scenario is that WIN will move to amend its offer in a bid to appease Sunraysia chairman and major shareholder Eva Presser.

In such a scenario, WIN could look to pay Sunraysia adviser David Gonski's fees in the takeover bid, and to foot the bill for the $1.36 million break fee.

Sources close to Sunraysia said last night that the break fee and tax implications were a factor in Sunraysia's rejection of the deal.

Sunraysia has now re-scheduled a meeting to approve the PBL Media bid for April 24, subject to court approval, being sought early next week.

Sunraysia was ordered to adjourn a shareholder meeting set up to vote on the sale last month, after WIN last month sued Sunraysia over perceived deficiencies in its recommendations to investors over the proposed sale to PBL Media.

Sunraysia claimed in yesterday's statement that accepting the WIN offer "would potentially expose Sunraysia to significant liability in the form of a damages claim by PBL Media".

Sunraysia sources claimed that as a result of a share buyback, the WIN bid for Channel Nine in Perth could have resulted in WIN taking control of the whole of Sunraysia, as opposed to merely Channel Nine Perth.

"Eva Presser could not commit publicly to participating in the buyback offer, as demanded by WIN at the last minute, because she didn't know the terms of the buyback offer," the source said.

Ms Presser claimed in a statement yesterday that WIN's conditions "were not capable of being satisfied".

Ms Presser owns or controls just over 49.7 per cent of Sunraysia's stock, while WIN owns 44.6 per cent of the group.