CBS Corporation, the US broadcaster, is buying Australia’s Ten Network.
Billionaires Lachlan Murdoch and Bruce Gordon, both significant shareholders in Ten, had been expected to end up as full owners.
The network went into voluntary administration in June after the two shareholders refused to increase or extend a $200 million credit facility past December.
The New York Stock Exchange-listed CBS Corporation, a key content provider to Ten and one of its biggest creditors, has entered into a binding agreement to acquire the business and assets of Network Ten.
No financial details were announced, including a final sale price, and a return to creditors hasn’t been finalised.
Administrator Jarrod Villani of KordaMentha says the receivers and administrators will work closely to ensure that operations continue uninterrupted while the transaction is finalised.
“As part of the agreement to purchase the Network Ten business, CBS will provide immediate financial support to ensure continuity of operations ahead of the upcoming meeting of creditors,” he says.
The CBS deal includes refinancing of existing secured debt, including shareholder guarantor fees. CBS is one of Ten’s largest creditors, said to be owed $795.5 million.
Ten in April posted a loss of $232.19 million for the half year in a tough advertising market. At that time, the company said the current debt facility was drawn down by about $66.2 million.
Earlier in the year analysts described the network as “un-investible” for most investors because of operating losses and funding concerns.
The company had been working to cut the costs of buying content from the major players in the US, including CBS and rival Fox.
CBS already has a close connection with Ten. In 2011, the digital channel, Eleven, was launched as a joint venture with CBS holding a third.
The receivers and managers for the free-to-air network today released the following statement:
The Receivers and Managers (Christopher Hill, Phil Carter and David McEvoy of PPB Advisory) and the Voluntary Administrators (Mark Korda, Jarrod Villani and Jenny Nettleton of KordaMentha Restructuring) of Ten Network Holdings Limited (Network Ten) today announced that wholly owned entities of the New York Stock Exchange listed, CBS Corporation have entered into a binding Transaction document to acquire the business and assets of Network Ten.
CBS Corporation is currently a key content provider to Ten and operates businesses which span the media and entertainment industries, including the CBS Television Network, cable networks, content production and distribution, television stations, internet-based businesses, and consumer publishing. CBS Corporation is listed on the New York Stock Exchange, and has a current market capitalisation of ~US$28 billion.
The Transaction contemplates an acquisition of Network Ten by CBS, which will be effected by way of a refinance of existing secured debt arrangements (including shareholder guarantor fees) in full and a Deed of Company Arrangement (‘DOCA’) that will be put to creditors at the second creditors meeting. Further details on the expected return to creditors and timing of the second creditors meeting will be provided by the Voluntary Administrators in their Report to Creditors to be released in the coming days.
The decision to enter an exclusive transaction deed with CBS followed a rigorous sales process run in conjunction with independent adviser, Moelis Australia Advisory Pty Ltd (Moelis).
Network Ten Receiver and Manager, 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.
Administrator Jarrod Villani of KordaMentha Restructuring stated: “the Receivers and Administrators will work closely together to ensure that operations continue uninterrupted while the transaction is finalised. As part of the agreement to purchase the Network Ten business, CBS will provide immediate financial support to ensure continuity of operations ahead of the upcoming meeting of creditors.