Bruce Gordon and Lachlan Murdoch have wasted no time in launching their latest bid to take over the struggling Ten Network.
This follows the Senate’s passing of the media law reform bill on Thursday (by a vote of 31-27), thanks to crossbench support from One Nation and the Nick Xenophon Team.
This law would abolish the “two out of three” and “reach” rule which, together, prevent a company from owning a newspaper, TV and radio station in the same city, and from broadcasting to more than 75 per cent of the population.
Emboldened by this legislative development, the media moguls — through their private companies Biketu and Illyria — submitted a new proposal to Ten’s administrators KordMentha on Friday.
The terms of the revised Gordon-Murdoch offer are “compelling” for a number of reasons such as the fact is is now a “significantly lower transaction risk”, according to the bid document reviewed by the ABC.
It is unclear at this stage whether KordMentha will put the duo’s joint bid for a vote at the second creditors’ meeting next Tuesday (September 19).
What is in the revised offer?
Under their new offer, Mr Gordon and Mr Murdoch have increased their pool of cash for Ten’s unsecured creditors by 57 per cent — from $35 million to $55 million.
This is higher than US media giant CBS’s offer of $32 million, according to a supplementary report released by KordaMentha on Monday.
In addition, their private companies, Ten’s employees and continuing trade creditors would receive 100c in the dollar, while all other creditors would get 5.75c in the dollar.
CBS, being Ten’s largest creditor, would also receive a more generous deal in the new proposal — $20 million, or 5.75c in the dollar.
In comparison, the US media giant would receive a lower amount of $7.4 million under the original Gordon-Murdoch bid.
“Ten will remain listed on the ASX,” Birketu and Illyria said in their latest proposal.
Ten’s 17,000 shareholders would get to keep 25 per cent of their equity, and the network would be re-listed on the ASX. But under the CBS bid, the shareholders’ holdings would be completely wiped out.
However, “all current shareholders in Ten (including all employee shareholders) will be diluted through the issue of [1.07 billion] options or shares” to Mr Gordon’s and Mr Murdoch’s private companies, according to the new proposal.
The additional shares or options would also give them a combined 75 per cent stake in Ten.
As for how this revised offer of $55 million would be funded, it would be through a new debt facility, which is expected to be guaranteed by Commonwealth Bank, and guaranteed by Mr Gordon and Mr Murdoch. But it is not yet know how much this debt facility is worth.
Court to decide Ten’s future
Mr Gordon has already succeeded in delaying the second creditors’ meeting, originally scheduled on September 12, this Tuesday, through his Supreme Court action against the administrators.
In the court action, Mr Gordon sought a declaration from Justice Ashley Black that KordMentha’s creditors’ report was deficient, and failed to give adequate information about his joint bid with Mr Murdoch.
They are also seeking orders for the weighting of CBS’s vote to be reduced to $1. That would significantly hamper CBS’s ability to vote on its own offer at next week’s creditors’ meeting.
The Supreme Court of NSW will hand down its decision on Monday morning — the day before the second creditors’ meeting.