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article imageMurdoch in Australia TV network bid after law changes

By AFP     Sep 15, 2017 in Business

News Corporation co-chair Lachlan Murdoch on Friday launched a bid for Australia's third-largest television network after the government struck a deal to make controversial changes to media ownership laws.

US broadcaster CBS last month secured an agreement to buy the Ten Network, which is in voluntary administration, days after Murdoch's investment company Illyria and media mogul Bruce Gordon got regulatory approval to make a bid.

Murdoch and Gordon's potential bid would only be possible if Canberra changed media laws to allow ownership across multiple platforms, with the first hurdle overcome after the reforms passed the upper house Senate on Thursday.

The laws are expected to come into force when the lower House of Representatives, where the ruling coalition has a one-seat majority, sits again in mid-October.

A spokesman for Ten's administrators KordaMentha confirmed to AFP they had received the bid, but would not comment further.

The Australian, a News Corp Australia newspaper, cited sources on Friday saying it was higher than the CBS offer.

Under the Murdoch/Gordon proposal, Ten would be relisted on the Australian stock exchange and shareholders would be allowed to keep 25 percent of their equity, The Australian reported.

The maximum payment to unsecured creditors would be Aus$55 million (US$44 million), 72 percent higher than CBS's, the newspaper added.

Creditors are due to vote on the CBS bid, which also needs approval from the Foreign Investment Review Board, on Tuesday.

Gordon, the owner of regional network WIN, had successfully adjourned the creditors' meeting from September 12 to Tuesday after filing an application with the NSW Supreme Court.

He is currently in court challenging the CBS bid and KordaMentha's report to creditors on the deal.

Ten, like other Australian and international media organisations, has struggled with slumping advertising revenues. It was placed in voluntary administration in June after Illyria and Gordon's Birketu refused to continue guaranteeing a key loan.

Under current legislation, introduced in the 1980s to protect diversity, media companies are blocked from owning television, radio and newspaper assets in the same city.

Metropolitan and regional broadcasters are also barred from merging.

The new laws would allow a company, such as News Corp, to own a TV station, newspaper and radio station in a single market. The "reach rule", preventing a single TV broadcaster from reaching more than 75 percent of the population, would be repealed.

Murdoch, the son of global media mogul Rupert, is also executive chairman of 21st Century Fox and has other industry interests.

In Britain, the government on Thursday referred a planned takeover of pan-European satellite TV giant Sky by 21st Century Fox to British regulators for an in-depth probe.

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