Foxtel’s plan to take a holding of up to 15% in the troubled Ten Network for $77 million has been approved by the Australian Competition and Consumer Commission.
The ACCC says it won’t oppose the deal which is part of a package aimed at raising $154 million for the free to air network.
The money will be used to reduce debt at the network which is suffering from an industry-wide fall in advertising revenue.
Ten, whose programs include The Bachelor and Masterchef, will also get an option for two years to become a 10% shareholder in Foxtel’s online streaming service Presto.
Foxtel, owned by News Corp and Telstra, will pay 15 cents a share. Current Ten shareholders will also be able to invest at the same price, with a further $77 million to be raised.
Ten will also take a 24.99% stake in Multi Channel Network (MCN), the Foxtel and Fox Sports joint venture for advertising sales.
Lachlan Murdoch, the News Corp co-chairman, has 8.5% of Ten through his private company Illyria.
The other big shareholder in ten is billionaire television industry pioneer Bruce Gordon who owns the regional network WIN. He has 15% of Ten and also holds almost 15% of rival network Nine.
“While the acquisitions will lead to a greater alignment of Foxtel’s and Ten’s interests, and will increase the degree of influence Foxtel has over Ten, the ACCC considers that the proposed acquisitions, on their own, are unlikely to result in a substantial lessening of competition,” says ACCC chairman Rod Sims.
“Foxtel and Ten will continue to face competition from the remaining free-to-air networks, and streaming services are also likely to become increasingly important to the sale of sports rights.”
Ten lost $168.3 million in the year to the end of August in a soft advertising market.
Ten shares were up 1.3% to $0.193.