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Class action threatened over CBS bid for Ten

Business

Disgruntled Ten shareholders are considering a class action against the troubled network as they face receiving no compensation for their stock under the takeover proposed by US media giant CBS.

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Australian Shareholders Association director Allan Goldin said preliminary talks have been held with law firms about a class action after some shareholders contacted the association and expressed their concerns.

“Class actions are very difficult and whether that is a possibility or if it’s not it’s really too early to say. But sure, we are having talks,” Goldin said.

The surprise CBS deal, announced to the ASX on Monday, includes ownership of Ten’s ELEVEN channel, in which CBS already has a 33 per cent stake, channel ONE and Ten’s growing digital platform TENPLAY.

Details on the financials of the acquisition are set to be released later this week and it is expected secured creditors will be paid and a guarantors’ fee owed to billionaire shareholders Lachlan Murdoch, Bruce Gordon and casino mogul James Packer for their part guaranteeing Ten’s current finance package will also be paid.

But shareholders are expected to receive no compensation for their shares being taken over by the $US28 billion ($A35 billion) broadcaster.

It is understood that, subject to court approval, CBS would acquire 100 per cent of Ten’s shares in a process that requires demonstrating the shares are worthless given the size of the secured and unsecured claims.

Goldin said ASA had written to Treasurer Scott Morrison, asking that CBS amend its offer so that shareholders do not miss out.

He said the association is hoping to have an informal discussion with one of Morrison’s advisers tomorrow.

“What the results of that will be we do not know,” Goldin said.

The deal came as a surprise to the ASA, which expressed disappointment the network would be leaving local hands.

“It is just like anything, you’d prefer Australian assets to stay in Australian hands if possible,” Goldin said, adding outdated media laws made it “almost impossible” for an Australian to bid.

“It really limits the competition because we have these laws that should have been done away with years ago.”

– AAP

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