Kerry Stokes’ Seven group won’t be allowed to bid for Consolidated Media Holdings. But it will reap half-a-billion dollars from News Limited instead.
Kerry Stokes’ Seven Group Holdings will receive around half a billion dollars in cash from the Murdoch empire after announcing today it would support News Limited’s takeover bid for Consolidated Media. Seven’s decision followed the Australian Competition and Consumer Commission rejecting its application to make a bid for Consolidated Media Holdings.
Seven Group owns 25% of Cons Media and James Packer’s private company has 55%. Packer has already announced his support for the News Ltd move, which will give it control of Fox Sports and half of Foxtel, restoring the situation that existed before the Super League war and settlement which saw the late Kerry Packer negotiate a 25% stake in Foxtel (carved out of News Ltd’s 50% stake) and half the News stake in Fox Sports.
The ACCC rejected Seven Group Holdings’ proposed takeover saying a deal would likely result in a “substantial lessening of competition in the market for free-to-air television services”. Chairman Rod Sims said in a statement this morning:
“The ACCC is concerned that the proposed acquisition would put Seven Network in a position of advantage over other free to air networks in relation to joint bids and other commercial arrangements with Fox Sports for the acquisition of sports rights.
“Being able to come to such arrangements with Fox Sports would enhance Seven Network’s ability to acquire the rights to premium sports.”
On that reading, the ACCC could reject any attempt by Telstra (which owns half of Foxtel) and would have to oppose any move by News to buy either the Ten, Seven or Nine FTA networks. There has been speculation that with Lachlan Murdoch as chairman and a near 10% shareholder in the Ten Network, News might be able to wiggle a bid for the struggling TV network. Lachlan Murdoch is also a director of the parent company, News Corp, which controls News Ltd.
Certainly, any attempt by News to get a stake in Nine if it goes into receivership and is sold would have to be opposed by the ACCC on the basis of its Seven decision.