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Court clears way for CBS takeover of Ten

Business

US media giant CBS’s $41 million takeover of the Ten Network is set to proceed, with a court approving the transfer of all shares in the local network to the American company.

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A hearing into the NSW Supreme Court concluded last Thursday, following days of delays due to three minor shareholders opposing the transfer – a deal which leaves them empty-handed.

Handing down his decision in the NSW Supreme Court today, Justice Ashley Black said there was “no prejudice or unfair prejudice arising” from the transfer of Ten shares to CBS.

Richard McHugh, representing Ten administrators KordaMentha, said the shares would not be transferred before 1700 AEDT on Tuesday, which would allow the shareholders time to decide whether or not to seek an injunction.

Black ordered that if the three shareholders – two of whom were present in court on Friday – intend on seeking any form of injunction they would have to give KordaMentha four hours notice before Tuesday’s deadline and prepare an argument to be heard before the court.

He explained to Yunfeng Du and David Gubbay that they could appeal the decision, but by doing so, they may be subject to damage costs caused by the delay.

“If you are contemplating an appeal, then it will plainly be desirable for you to finalise your position over the weekend and give notice to the plaintiffs,” the judge said.

Administrator Mark Korda told reporters outside of court that a further delay could mean Ten might lose out on large advertising contracts, talent resigning and other new contracts.

He said he did not think that would happen but, if an appeal were lodged, he expected it to be settled by Wednesday.

“We want to take channel Ten out of administration and give it a great future so there could be damages but I am sure we will get it settled and it will be fine,” Korda told reporters.

The CBS takeover trumped a competing offer from billionaire Ten shareholders Lachlan Murdoch and Bruce Gordon and was almost unanimously backed by Ten’s creditors, including the broadcaster’s employees, at a meeting in September.

The deal now awaits the expected approval from the Australian Securities and Investments Commission.

In other media sector news, News Corp has almost doubled its first-quarter earnings thanks to growth across all business segments including news publishing and, in particular, its digital real estate services.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the three months to September 30, was $US249 million ($A324 million) compared to $US130 million a year ago.

The Rupert Murdoch-led media giant said its operational improvement was driven by continued growth in digital real estate services as well as lower costs from its news publishing business, including Fox Sports, and a one-off $US46 million benefit.

Digital real estate was again the biggest contributor to earnings growth, with the segment up $28 million, or 42 per cent, compared to a year ago.

Chief executive Robert Thomson expects the division to continue to provide growth for News Corp in the coming quarters.

Revenue for the first-quarter was $US2.06 billion, up five per cent on $US1.97 billion in the prior corresponding period, partially thanks to the continued growth from real estate businesses, REA Group and Move.

News Corp said the acquisitions of Australian Regional Media (ARM) and Wireless Group, plus a $26 million positive impact from foreign currency fluctuations also helped push overall revenue higher, but this was partially offset by lower print advertising revenues.

Net income was $US87 million, compared to nil in the prior period, driven primarily by higher total earnings and lower depreciation and amortization expense.

– AAP

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