Regulator has no qualms with News bid to control Foxtel
BUSINESSDESK: The Australian Competition and Consumer Commission will not oppose News Corp’s $A1.97 billion takeover bid for rival Consolidated Media Holdings which would give the Rupert Murdoch-controlled media group control of Australia's biggest pay-television business, Foxtel.
The Australian anti-trust regulator decided News Corp acquiring ConsMedia, which is controlled by billionaire James Packer, won't lead to a substantial lessening of competition as the pay-TV operator doesn't have other broadcast interests across the Tasman.
"The ACCC considered that the proposed acquisition was unlikely to materially change News Corporation's incentives in relation to the supply of content in Australia," chairman Rod Sims said.
ConsMedia holds a 50% stake in Fox Sports Australia and a quarter-stake in pay-TV operator Foxtel. News already owns half of Fox sports and 25% of Foxtel.
The ACCC is still looking at Seven Group's bid to head off the News takeover with its own offer, though it may be problematic because of Seven's existing television network. Kerry Stokes' Seven Group already holds a quarter of ConsMedia and can block the News move.
The News bid came a week before the Murdoch-controlled group announced plans to split its operations into two separately listed companies along print and broadcasting lines.
The company, which is the biggest shareholder of New Zealand's Sky Network Television, landed itself in hot water when its British unit was embroiled in a phone-hacking scandal that has resulted in parliamentary hearings and criminal charges being laid.
More recently, News' Australian business unveiled restructuring that will slash its divisions to five from the existing 19 and shift its focus towards digital and pay-TV operations.
The move was in reaction to dwindling print advertising revenues which saw dramatic cuts at rival Fairfax Media which require 1900 redundancies over the next few years.
Shares in News rose 0.6% to $A22.10 on the ASX, while ConsMedia stock gained 0.3% to $A3.44, a 1.7% discount to the takeover price.