Economy & Finance

Australia’s Seven eyes counterbid for Packer’s Consolidated

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SYDNEY (Reuters) – Australian media conglomerate Seven Group may bid to gain control of Consolidated Media Holdings, the nation’s competition regulator said, taking on Rupert Murdoch’s News Corp in a battle for coveted pay-TV assets.

News Corp’s Australian unit News Ltd had on Wednesday made a $2 billion takeover offer for CMH, which owns 25 percent of pay-TV business Foxtel and 50 percent of content provider Fox Sports.

Seven Group Holdings, controlled by billionaire Kerry Stokes, holds a 24 percent stake in CMH, while fellow billionaire James Packer owns 50.1 percent.

Packer is looking to opt out of media in favor of his casino interests and has said he would accept News Ltd’s bid in the absence of a higher offer.

The Australian Competition and Consumer Commission said in a statement on Friday that Seven had said it was actively considering acquiring further shares in CMH, asking the commission to review a proposal to buy all CMH shares it does not currently own.

Seven was not immediately available for comment.

Seven said on Wednesday it was considering its options after News Ltd’s A$3.50 a share bid, pitched at a 14 percent premium to CMH’s last traded price but below its peak of A$4.75 in late 2007.

Richard Colquhoun, a portfolio manager at Antares Capital, questioned whether Seven would have the financial firepower to take on News Corp. “Kerry versus News Corp? I’d call that mischief,” he said. Antares has shares in News Corp.

For News Corp, which has also announced sweeping cost and job cuts in Australia, a successful bid would double its stake in Australia’s dominant pay-TV business Foxtel to 50 percent and give it 100 percent of Fox Sports.

Seven Group is the largest shareholder in KKR-backed Seven West Media, owner of Australian commercial television network Seven Network and The West Australian newspaper. It also owns WesTrac, a Caterpillar dealership.

The news came after the market close, at which point CMH shares were down 0.9 percent. Seven Group was down 1.7 percent and News Ltd was up 0.7 percent.

(Editing by Edwina Gibbs and David Holmes)

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