James Packer has had a victory in his battle with the board of Ten Network, with the company agreeing that chief executive Nick Falloon will leave the company completely after the annual general meeting in December.
Packer, who grabbed an 18% stake in a $280 million raid on Ten two weeks ago, has been pushing for a shakeup of the company’s board and strategy.
Ten initially agreed that Falloon would stand down as chief executive to become a non-executive chairman, but has now agreed that Falloon will sever all ties with the company in December after Ten’s AGM.
However, Ten is standing firm on its decision to offer Packer and Lachlan Murdoch, who now looks almost certain to buy half of Packer’s stake in Ten, just two board seats. Packer wants three board positions.
“The Board maintains that the number of directorships offered is appropriate having regard to the size of the shareholding interest currently held by (Packer’s investment vehicle) CPH,” Ten said in a statement.
“In inviting Packer and Murdoch to join the company’s board, the company maintains its objective of ensuring ongoing board stability, while meeting its obligations to all shareholders.”
Whether the dumping of Falloon is enough to stop Packer’s push for a third board seat remains to be seen.
It also appears that Packer’s share raid will result in a double disappointment for Falloon.
According to a report in the Sydney Morning Herald, Falloon was attempting to put together a management buyout of Ten at the time of Packer’s purchase.
The report claims Packer got wind of the plan, which was to be financed by US private equity investors Hellman & Friedman, and he decided to make a play for Ten.
Falloon has not commented on the report.
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.
