Foxtel has advanced an agreement with Ten Network Holdings (ASX:TEN) to acquire a 14.9 per cent stake of the company. The company has attempted to complete the deal before it releases its half-year results on Thursday. People involved with the deal have said Foxtel is prepared to pay $85m at 18c per share to the broadcasting company Ten Network. The broadcasting company is also attempting to raise an additional $100m through a general offering to existing shareholders at the same price. The broadcaster has been embattled for some time now and its shares are trading near an all time low. JP Morgan analysts are projecting a 5.5 per cent fall in revenue in the company’s first-half results. The US bank believes the company will lose $26m before interest, tax, deprecation and amortisation for the full year.
Ten Network will need to seek shareholder approval if it issues shares worth more than 15 per cent of its equity. If there is some issue with the two proposed deals, it will be the third time in three years the company has gone to shareholders with an equity raising. The company launched a $200m three-for-eight entitlement bid in June 2012, which was followed by a significantly discounted $225m raising a half-year later. Current shareholders of the broadcasting company include Bruce Gordon, Gina Rinehart’s Hancock Prospecting, James Packer and Lachlan Murdoch. Mr. Gordon had previously attempted his own $70m to $100m offer, but lost interest after the process dragged on for six months. Shares of TEN are up .5c, or 2.44 per cent, at 21c per share around 1:57pm on Monday. TEN is down over 23 per cent in the last 12 months and over 6.5 per cent so far this year.
Author: Matthew Dibb
Apr 27, 2015
Matthew has an extensive track record in equity markets and derivative advisory. Spanning a career in several investment banks and prviate wealth groups including Macquarie Bank, his specialist knowledge relates to capital market advisory and equity market analytics. Matthew has a diploma in Financial Advisory, Applied Finance and is ADA 1 & 2 accredited.