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Murdoch and Parker to Buy Consolidated Media Holdings

A good team with the money and the name for the job

Jan 22, 2008 09:27 GMT  ·  By
Lachlan Murdoch
   Lachlan Murdoch

News Corp. owner's son, Lachlan Murdoch, has teamed up with James Packer, the richest man in Australia to buy Consolidated Media Holdings and all it is connected with. And that's not little, I assure you: a 25% stake in Foxtel (Australia's leading pay/ cable TV company) and PBL Media (owners of the Channel 9 network), 50% of Fox Sports, 27% of Australia's leading online jobs site Seek.com.au, a 50% stake in NineMSN (the Australian version of MSN) and a stake in Carsales.com.au. If that's little, you should really consider your sense of proportion.

All of the above is just to be added to the company itself and all is valued by the two bidders at 2.8 billion USD. The rumors that first surfaced yesterday helped Consolidated Media shares up with 9.6 percent, the biggest gain since December 3rd and the biggest gain on the entire Bloomberg World Media Index, for that matter.

"In a more stable equity market, we might have expected key shareholders to hold out for a higher price," Alice Bennett, an analyst at Merrill Lynch & Co. in Melbourne, was quoted by Bloomberg.com. "With the prospect of slowing U.S. earnings growth impacting the Australian ad market, shareholders in our view are more likely to accept the offer and take the certainty of cash," she concluded. The shares will be equally divided between the two future owners, who were extremely generous with the offer they made: it was 24.4 percent higher than the last price tag placed on Consolidated Media prior to their intervention.

As always, there's a catch: James Parker already owns 38 percent of the company, so most likely, if not definitely, any other rival's offers will be rejected on sight. He is momentarily trying to receive exemption from the Australian Securities and Investments Commission in order to have the legal backup.

Better hope that the two have better luck this time than the last time they joined forces for a project. Back in 2001, the pair lost somewhere around 900 million dollars when their joint investment in the mobile-phone company One.Tel Ltd. managed to be filed for bankruptcy.