MacBank, CanWest the latest players in media scramble, by Lisa Murray and Michael Evans - 21st October 2006
(The Sydney Morning Herald)

MACQUARIE Bank and CanWest have joined the stampede to secure Australian media assets.

It is understood the Ten Network's major shareholder, CanWest Global Communications, received an approach from Macquarie Media Group last week for its stake in the commercial broadcaster.

But the Asper family's CanWest has so far resisted Macquarie's overtures and instead is understood to have appointed Citigroup to advise it on acquisitions in Australia. Canada-based CanWest holds a 56.5 per cent economic interest in Ten through shares and convertible debentures.

Ten's executive chairman Nick Falloon expects CanWest to convert the holding into equity once foreign ownership limits are scrapped next year.

CanWest is understood to be considering its options for Australia in the wake of media law changes, preferring acquisitions that may include increasing its stake in Ten or a tie-up with radio network Austereo.

Austereo said this week its major shareholder, Village Roadshow, had advised "its investment in Austereo is currently not for sale". However, in recent weeks it sold down its stake from 67 per cent to 50.2 per cent, prompting some investors to suggest it may sell at the right price.

Austereo shares jumped 6 per cent to $2.25 on Friday. Ten shares rose 5 per cent to $3.50.

Investors believe Austereo, owner of the Triple M and Today FM networks, would be a perfect fit with Ten, which targets 18 to 49-year-olds. They have an existing relationship through their simulcast of the Australian Idol series.

The latest moves cap off a monster week for the media industry as the big players jostle for position ahead of changes to ownership laws next year. While the changes passed through Parliament this week, the Government is yet to set a start date.

John Fairfax Holdings boss David Kirk said on Friday he felt "no pressure" to act in response to a share raid on the company by Rupert Murdoch's News Corp.

Publishing & Broadcasting initiated the week's corporate moves by announcing plans to spin off a half share in its media assets, creating a new $5.5 billion company, PBL Media, with private equity group CVC Asia Pacific.

The Seven Network paid $343 million for a 14.9 per cent stake in West Australian Newspapers and News Corp picked up a 7.5 per cent stake in Fairfax for $364 million.

Industry watchers expect Macquarie will set its sights on regional media company WIN Corp, owned by Bruce Gordon, a media player who divides his time between Bermuda and WIN's head office in Wollongong.

WIN is also one of the industry's most active investors with a 13 per cent stake in Ten, 1.5 per cent of Publishing & Broadcasting and 44 per cent of Perth's STW Channel Nine station.

WIN owns Australia's largest regional TV network and has a significant stake in telecommunications company SP Telemedia.

It also owns TV infrastructure business Digital Distribution Australia, which operates an east coast wireless telecommunications network, production company Crawford and has bid for control of pay TV operator, SelecTV.

Another Macquarie investment fund, Macquarie Communications Infrastructure Group, which owns broadcast towers, may also look to acquire some WIN assets.

Citigroup declined to comment on its involvement with CanWest yesterday. It is also advising Seven.


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