Foxtel gets closer to Austar swoop
Regulatory approval still pending for monopoly
The phone-hacking scandal might have slammed the brakes on Murdoch's bid for BSkyB in the UK, but in Australia Foxtel is getting closer to creating a national Australian Pay-TV monopoly with the acquisition of rival Austar.
Definitive agreements have been announced between Austar's parent company, Liberty Global, and the Murdoch-owned Foxtel, under which Foxtel will buy all of the issued shares in Austar for $1.52 per share. The announcement came following the meeting of conditions which had been outlined previously in an indicative, non-binding conditional proposal from Foxtel.
Under the new bid structure Liberty Global, the 54% owner of Austar, will buy the remaining shares in the company before selling Austar to Foxtel. Once completed the merged pay-TV platform will have revenues of more than $2.8 billion.
“A merged Foxtel and Austar would make compelling strategic sense and it would continue to invest and innovate in a superb digital service for consumers across Australia, including investing heavily in marvellous new original Australian content”, said Foxtel CEO Kim Williams.
The deal still needs to attain regulatory approvals including from the Foreign Investment Review Board and the Australian Competition and Consumer Commission, in addition to court and Austar minority shareholder approval.
The transaction will be funded by a combination of Foxtel bank debt and shareholder capital contributions in the form of subordinated shareholder notes. ®