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US broadcaster CBS to buy Ten Network

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 New York-listed CBS will buy Network Ten from administrators KordaMentha and receivers PPB Advisory in a deal that sees three banks repaid and three billionaires compensated, but leaves nothing to tens of thousands of shareholders, it emerged on Monday morning

The deal also means Lachlan Murdoch and Bruce Gordon have failed in their attempt to buy the network. Both billionaires were shareholders and had also guaranteed a bank loan to keep the network afloat.

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CBS to buy Ten Network

Ten Network's receivers, managers and voluntary administrators have confirmed that CBS has entered into a binding agreement to buy the broadcasters business and assets.

CBS will refinance Ten's existing debt, including a loan from Commonwealth Bank and guarantor fees of about $33 million owed to James Packer, Mr Murdoch and Mr Gordon, and will implement a deed of company arrangement, according to KordaMentha. Creditors will be given the chance to vote on the deal at the second creditors' meeting.

Secured loans include at least $98 million to Commonwealth Bank, $841,000 to Westpac and $640,000 to ANZ Bank, according to a list of creditors. This means CBS will take over Ten for about $123 million. 

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However, shareholders will receive nothing, with PPB Advisory confirming the deal includes CBS delisting Ten from the sharemarket.

Apart from the three guarantors, major shareholders include Foxtel with 13.9 per cent of shares, Gina Rinehart with 8.2 per cent, and Seven Group Holding's subsidiary Network Investment Holdings with 3 per cent. 

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"CBS will acquire 100 per cent of the shares in Network Ten," a PPB spokesman said.  

"This process requires demonstrating that the shares are worthless given the quantum of the secured and unsecured claims. In such a scenario where creditors are not being repaid in full it would mean that existing shareholders would not receive any return."

CBS will also provide "immediate financial support to ensure continuity of operations" at Ten.

CBS will also launch "CBS All Access" in Australia, its subscription video on demand service, it announced.

CBS submitted an $843 million claim during the administration process, believed to be the balance that Ten owed it for a programming rights contract.

CBS already has a 33 per cent stake in digital channel Eleven. This deal will see it take over Ten's digital terrestrial channel, One, Eleven and TenPlay.

"Network Ten is a prime broadcasting asset with over half a century of experience and brand equity in Australia," Leslie Moonves, chairman and chief executive of CBS Corporation, said.

"We have been able to acquire it at a valuation that gives us confidence we will grow this asset by applying our programming expertise in a market with which we are already familiar."

Ten's chief executive Paul Anderson said CBS and Ten have had a strong relationship for a number of years.

"We are very excited about further developing that relationship with CBS as an owner and strength that they will provide to the company at this critical time," Mr Anderson said.

President and chief executive of CBS Studios International Armando Nunez said Ten and CBS "have enjoyed a close working relationship for nearly two decades, and now CBS will continue to provide Network Ten with access to the very best in US content".

"We also look forward to working with the outstanding team at Network Ten to enhance and expand on its great legacy of Australian news, drama, reality and sports programming. This acquisition not only presents CBS with considerable broadcasting opportunities in Australia, but also allows for further multi-platform distribution and growth."

And is a blow to Foxtel's subscription television service, CBS's internet-based All Access service includes rights to stream such as some of America's National Football League (NFL) games, college football, college basketball and major golf tournaments. 

Network Ten receiver and PPB Advisory partner Christopher Hill, said: "Network Ten has played a significant role in Australia's media landscape over many decades, and the sale of the business to CBS will allow the iconic broadcaster to move into a new chapter on a strong and stable footing."

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