US TV network giant CBS Corporation has formally announced that it is all set to buy Australia’s number three broadcaster, Ten Network.
The announcement came as a surprise to the business world as it was anticipated that the billionaire share holders of Ten, Lachlan Murdoch and Bruce Gordon were seeking a review from ACCC for a joint bid to take over the network.
Ten went into voluntary administration in June after the ongoing credit facility of $200 million expired and both the major shareholders refused to extend it or sign a new deal for future funding.
CBS Corporation, listed in New York Stock Exchange, has been a major content provider to Ten including NCIS and now it has emerged as one of the biggest creditors of Ten, after the revelation that $843 million was owed to the company.
Unveiling as the buyer of the unsettled Network, CBS has reached an agreement with Ten to acquire all its assets and business, including a 100 percent stake in channel Eleven, along with sister channel One and digital platform TEN play.
Channel Eleven was a joint venture of CBS Studios International and Ten, created in 2010 and launched officially in January 2011, with CBS holding 33 percent of stake. It was described as the new and unique destination for bold and fun programming in Australia.
Financial details of the deal, including the final bid or the policy for creditors, have been kept under wraps.
CEO and chairman of CBS Corporation, Les Moonves, who is undisputedly most influential television executive in the world said, “CBS has been able to acquire Ten at a valuation which enables us to grow this network by implementing our programming expertise in an environment with which we are already familiar.” No financial details were revealed regarding the final sale price or the status of creditors.
The administrators Mark Korda, Jennifer Nettleton and Jarrod Villani of KordaMentha, who have been advising Ten since February, have assured that they will work closely with the receivers to make sure that all the operations run smoothly while the transaction is being finalised.
They made it clear that according to the agreement, CBS will be providing paramount financial support for the operations of Ten Network ahead of the impending meeting of the creditors.
The deal with CBS also includes restructuring of existing debts, including the guarantor fees of the shareholders.
In April, Ten had shown a loss of $ 232.19 million, calculated half yearly, with the debt facility drawn down by nearly $66.2 million and thus was written down by analysts as un-investable.
The company had been focusing on reducing the cost of procuring the content from major media players, including CBS and Fox.
The chief of CBS studios international, Armando Nunez, assured in a statement that CBS would continue to provide Ten Network with best of its US content as a part of the acquisition.
Promising to reverse the present situation of Ten Network, CBS chief added, “CBS acknowledges the importance of Ten in Australian Broadcasting Community. We are committed to the reliable, efficient and successful turnaround in development and operations of Ten to extend support for a continuous growth in Australian media.”
He assured that CBS is looking forward to work with the exceptionally good team of Network Ten to not only expand and enhance its great legacy of Australian reality, drama, news and sports programming but also allow further growth and multi-platform distribution.
Chief executive of Ten, Paul Anderson, said that the acquisition will have a positive effect on the relationship CBS and Ten shared over the licence rights of the US content.
“Ten and CBS have maintained a sturdy relationship for a number of years; we are very positive and excited about taking this relationship further with CBS as the owner and the influence and strength they bring to the company at this critical time”, said Mr Anderson.
The managers and receivers, Christopher Hill, David McEvoy and Phil Carter of PPB Advisory, and voluntary administrators, Mark Korda, Jenny Nettleton and Jarrod Villani of Korda Mentha, representing Ten Network also issued a joint statement establishing following points:
CBS Corporation has entered into a binding transaction document to acquire the assets and business of Network Ten.
CBS is the main content provider to Network Ten and is operating businesses which cover the entertainment and media industries, including CBS Television Network, content production and distribution, cable networks, internet based businesses, television stations and consumer publishing.
The New York Stock Exchange listed CBS Corporation has worth US $ 28 billion of current market capitalisation.
The undertaking observes an acquisition by CBS over Network Ten, which will come into effect with redefining of existing secured debt arrangements, including the guarantor fees of the shareholders, in full and a Deed of Company Arrangement, which will be conveyed with creditors at the second creditors meet.
Any further details regarding the expected return to creditors and the date of the creditors meet shall be provided by the Voluntary Administrators in the Report to Creditors to be declared in a few days.
The final decision of Ten to enter into an exclusive transaction deed with CBS is the result of a meticulous sales process run in association with the independent consultant, Moelis Australia Advisory Pty Ltd.