Fox joins court challenge to CBS’ Australian TV buyout

Reuters . Sydney | Update:

The CBS “eye” and logo are seen outside the CBS Broadcast Center on West 57th St. in Manhattan, New York. Photo: ReutersRupert Murdoch’s Twenty-First Century Fox Inc joined a court challenge on Tuesday against rival U.S. cable network CBS Corp’s proposed buyout of struggling Australian television broadcaster Ten Network Holdings Ltd.

The U.S. broadcasting heavyweights faced off in the Australian courtroom amid a battle for control of Ten, a ratings laggard which went into administration three months ago following long declines in viewership and advertising revenue.

Lawyers for Ten said the private company of Murdoch’s son, Fox Executive Chairman Lachlan Murdoch, had offered to revise the offer it made in June before it was elbowed aside by CBS.

Murdoch’s company Illyria and its Australian partner had informed Ten overnight on Monday that they “wish to in some way reopen their offer by opening negotiations”, Ten lawyer Richard McHugh told the court.

Illyria’s offer has not been disclosed but McHugh said the company had still not provided anything that could be put to Ten’s creditors.

Documents released on Monday by the administrator show CBS, the free-to-air network’s major creditor, is prepared to pay at least A$201.1 million ($162 million) in cash for Ten.

While Ten was worth less than A$60 million when it went into administration, it is an attractive takeover target because of its national reach and strong brand recognition in the world’s 12th-largest economy.

Twenty-First Century Fox and CBS are Ten’s largest creditors. Lachlan Murdoch and his Australian co-bidder, television entrepreneur Bruce Gordon, were also major Ten shareholders.

Gordon filed the court action seeking to delay the CBS takeover, arguing the administrators had not properly informed creditors of their options.

After New South Wales state Supreme Court Judge Ashley Black agreed to let Twenty-First Century Fox join Gordon’s action, a lawyer for the U.S. company said the terms of the CBS offer were unfair.

“They are getting 100 cents in the dollar and we seem to be getting 1.75 cents in the dollar,” lawyer Ian Pike told the court.

Pike did not refer to a rival offer from Lachlan Murdoch and Gordon, but Gordon’s lawyer, Andrew Bell, told the court his client was concerned administrators “made the decision not to put the competing (offer) to the creditors”.

The hearing continues.

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