Just when it seemed James Packer had turned his back on the mainstream media, the mogul has shocked the market by launching a $250 million share raid on Ten Network.
Packer paid around $1.50 a share – a reasonable premium to the $1.40 a share Ten has been trading at recently – to acquire a stake of about 16% in Australia’s third most popular television channel.
However the raid, orchestrated by investment bank UBS on Packer’s behalf, is probably not over. Reports suggest Packer wants a stake of about 20%, which would put in the position to potentially launch a takeover of Ten.
That deal would cost about $1.6 billion.
The moves comes two years after Packer all but sold out of the Nine Network, which had been synonymous with his family – and particularly his father Kerry – for decades. Packer’s private investment vehicle, Consolidated Press Holdings, owns just 1% of the company that currently owns the Nine Network, PBL Media.
While Packer’s share raid has put the mogul firmly back into the spotlight of the business world, the question analysts and commentators are asking is: Why does he want a piece of Ten Network?
In recent years, Packer has thrown the weight of his fortune and his focus into his gambling empire, Crown Limited, which owns casinos in Australia and stakes in casino operations in Macau and Britain.
Packer’s other big investment is in Consolidated Media Holdings, which is essentially a media investment company, owning a 25% stake in pay television operator Foxtel and a 50% stake in Premier Media, a production company that produces sports content for Foxtel.
While Packer has steadily increased his stake in Consolidated Media in recent times – he spent $200 million to take his stake to just over 50% earlier this month – there was no suggestion that a return to mainstream media was on the cards.
While Packer and Ten are yet to comment on the deal, early speculation suggests Packer may be looking for ways to bring Ten and Foxtel closer together, or may simply believe Ten is undervalued.
Packer’s raid on Ten will bring him face to face with another of Australia’s great media billionaires – Bruce Gordon, owner of the WIN regional television network, owns 12% of Ten.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
