News Corp trims $2B bid for Consolidated Media
NEW YORK (AP) — News Corp has made a slightly lower, but binding bid to acquire Australian media investment company Consolidated Media Holdings, as Rupert Murdoch's media company seeks to boost its stakes in TV service provider Foxtel and the channel Fox Sports Australia.
The details of the binding bid, for 3.45 Australian dollars (US$3.57) per share, were announced in Sydney on Friday by Consolidated Media.
The bid amounts to 1.94 billion Australian dollars (US$2.01 billion). That is slightly lower than the non-binding bid of 3.50 Australian dollars per share (US$3.63), or 1.97 billion Australian dollars (US$2.04 billion), that News Corp offered in June.
However, Consolidated Media said that it would pay shareholders a dividend of six cents per share on Oct. 5, bringing the cash compensation for existing shareholders to 3.51 Australian dollars per share.
James Packer, whose Consolidated Press Holdings Ltd. owns a 50 per cent stake of Consolidated Media, said in a statement that the deal "is a great outcome for CMH shareholders and for News and it reflects a fair price."
Eight directors including Packer recommended that the bid be accepted, while two directors representing the 25 per cent stake held by Seven Group Holdings Ltd. withheld their recommendation.
The bid of 3.45 Australian dollars represents a 15 per cent premium to the average share price in the three months before Consolidated Media said it had preliminary discussions about a potential change of control on May 3, it said.
A News Corp. spokesman did not return a message seeking comment.
If the acquisition is completed by the end of November as planned, News Corp. will double its stake in Foxtel to 50 per cent and in Fox Sports Australia to 100 per cent.
News Corp. has said it would spin off Consolidated Media's assets into a separate company along with its newspaper publishing and book assets in a reorganization planned for next year.
News Corp.'s non-voting Class A shares fell nine cents to US$24.41 in afternoon trading Friday in New York. Consolidated Media shares fell 2 Australian cents to close at 3.42 Australian dollars (US$3.55).