Billionaire media mogul Bruce Gordon has failed to gain more time for himself and partner Lachlan Murdoch to conjure up a second, more credible bid for the Ten Network.
In the NSW Supreme Court this morning, Justice Ashley Black threw out Gordon’s case, saying he was “not satisfied” that lawyers for Gordon’s companies had established any deficiencies in the creditors’ report (from administrators KordaMentha) that would require orders to be made. He also said he was not persuaded that CBS should have its voting rights reduced or removed.
That means unless Gordon or Murdoch can find another Supreme Court judge to appeal to, or the court of appeal to issue an injunction, the second creditors’ meeting for the Ten Network will proceed in Sydney tomorrow, with CBS expected to prevail. CBS has already released more than $200 million into Ten, paying off the Commonwealth bank debt and fees, paying out the guarantor fees to Lachlan Murdoch, Bruce Gordon and James Packer and their private companies, as well as establishing a $30 million working capital fund, which has already been drawn to by a reported $3.6 million.
Lachlan Murdoch could trump all that by producing a full bid from another source — say News Corp or 21st Century Fox (he is co-chair of both companies and his family dominate the two companies). Since the case was heard urgently last week, Gordon’s company, Birketu, and Murdoch’s company, Illyria, have made a fresh offer for Ten by lifting their bid to $55 million from $35 million.
Black said he had “not had regard to commercial developments which may have occurred after the hearing was completed and judgment reserved” because the parties did not seek to have a further hearing (He was referring to the new bid from Murdoch and Gordon).
CBS has the biggest debt from Ten and will dominate the part of the creditors’ meeting that votes by the value of debt held. The 750 staff dominate the second vote — by the number of creditors at the meeting. According to the AFR at the weekend, the latest deed of company arrangement from Murdoch and Gordon “states it does not include any redundancies, a fear of many staff”. Persuading Ten’s staff to back the bid is important because they have a key role in voting.
“There is zero enthusiasm within Ten staff for a Lachlan Murdoch takeover,” a staff member told Fairfax Media in a separate report at the weekend.
And that distrust is why, if Murdoch and Gordon get control of Ten, the situation will worsen. Hundreds of people have lost their jobs at Ten over the years — it’s why there’s enormous distrust. Murdoch and Gordon have a long history of cutting jobs in their companies, and one of their proposals in the past was to bring in Sky News (owned by Murdoch’s News Corp) to run Ten News, a move that would mean a lot of job losses.