It’s tough being a Packer with $4 billion or more and not being taken all that seriously in Australian business, outside of gambling. From TV, to property and investors generally, PBL is being challenged in a way rarely seen in the history of Australian media.
WIN, of course, showed its impudence first off, topping the $136 million “mop-up” offer from PBL Media for the underperforming STW9 in Perth. WIN has now bid $163.2 million in a second Packer topper, forcing the reluctant board of STW 9’s owner, Sunraysia TV, to recommend the new and higher offer.
That forced PBL Media into trying to counter the Perth play by WIN. Rather than not top the offer because it said it was final and wouldn’t be increased, PBL Media has had act like what it really is — a quasi-private equity fund and not a media group — by launching a “hug” for Nine regional affiliate in NSW, NBN.
NBN’s owner, SP Telemedia revealed the approach, described in true private equity style as “non-binding”, in a statement to the ASX last night. That offer will be somewhere north of $170 million, which is well above the cost of the “final” bid for STW.
Then there’s the faltering performance of the very expensive and late on line real estate business, myhome.com.au. It started earlier this year around four months late and despite a Saturday morning (10am) infomercial program on Nine in most markets (but not WIN) called My Home (just 96,000 viewers last Saturday across the country, hardly worth it), the website suffered a wounding loss yesterday.
According to The Australian the First National property franchise agency group, the country’s third-largest, has pulled an estimated 30,000 listings from myhome.com.au. First National said it would no longer be associated with myhome.com.au because of unspecified “operational” concerns.
“MyHome and First National no longer have a formal relationship and that was based on some operational issues from MyHome,” First National chief executive Ray Ellis said. MyHome has had a turbulent first 60 days after it fell out with Australia’s biggest franchise group, Ray White, last month.
The fact MyHome isn’t being run by WIN is another example of how it’s tough being a Packer these days. WIN has refused to run that program and the Catch Up, the Monday-to-Friday chat show at 1 pm because of the continuing dispute over the amount of money WIN should be paying in affiliation fees.
Talks on that deal resume this week but another problem has been revealed by the row: the absentee CEO, Eddie McGuire, who pops along to a mate’s birthday party and AFL games with greater alacrity than boosting Nine’s below-par ratings this year.
And then, there’s perhaps the biggest blunder of all so far from the PBL camp, revealed today in the Sydney Morning Herald:
PBL Media has scrapped its plan to raise $600 million from the retail market, sidestepping the requirement to release a public prospectus with detailed information about executive pay packets and any sell-off strategies.
The company, which is jointly owned by private equity firm CVC Capital Partners and Publishing & Broadcasting Ltd, had briefed retail debt investors about a listed subordinated note issue last month, which would have given holders the chance to take part in a re-float of PBL Media at a 2.5 per cent discount.
But instead PBL Media opted to raise the money through more expensive unlisted subordinated notes, which were taken up by about seven institutional mezzanine debt providers.
It is understood that the company was keen to avoid the high administrative costs, investor roadshow and ongoing disclosure requirements associated with listed notes.
I think the key phrases are “ongoing disclosure requirements” and “detailed information” on executive pay and other agreements and strategies. You have to ask why did PBL Media and PBL think they could have avoided these disclosure requirements in the prospectuses and then in an ongoing fashion. Did the PBL camp lobby the ASX, only to be rejected?
It’s a tough life when you’ve got all that power and money and the little people keep on bugging you. Wouldn’t have happened when the old bloke was alive.