UPDATE: Austar, Foxtel Reach A$2.5 Billion Takeover Deal
11 Juillet 2011 - 1:12PM
Dow Jones News
MELBOURNE (Dow Jones)--Australian pay television companies
Austar United Communications Ltd. (AUN.AU) and Foxtel said Monday
they had reached agreement for Foxtel to take over Austar in a deal
that values Austar at A$2.5 billion.
Austar said in a statement the proposed deal, which had the
backing of majority shareholder Liberty Global Inc. (LBTYA), would
result in its shareholders receiving A$1.52 per share. The takeover
will be conducted through a series of transactions and a scheme of
arrangement.
Foxtel made its bid for Austar in May and the companies and
Liberty Global have been in discussions on the terms of the
takeover since that time.
The statement said Austar's independent directors recommended
minority shareholders vote in favor of the scheme in the absence of
a superior offer and subject to an independent expert concluding
that the takeover is in the best interests of shareholders.
"We look forward to completing the transaction and believe it
represents compelling value for all shareholders," Austar Chairman
and Liberty Global Chief Executive Mike Fries said in a
statement.
The takeover is subject to conditions including approval by
shareholders, the Australian Competition and Consumer Commission,
the Foreign Investment Review Board and rulings by the U.S.
Internal Revenue Service.
Shareholder meetings to vote on the takeover are yet to be
scheduled but Austar said the transaction is expected to be
concluded in either December or early 2012.
Foxtel, which is 50% owned by Telstra Corp. (TLS.AU) and 25%
each by News Corp. (NWS) and Consolidated Media Holdings Ltd.
(CMJ.AU), said in a statement the takeover would result in the
creation of one of Australia's largest media companies with
anticipated annual revenue of more than A$2.8 billion.
"A merged Foxtel and Austar would make compelling strategic
sense and it would continue to invest and innovate in a superb
digital service for consumers across Australia," Foxtel Chief
Executive Kim Williams said.
Foxtel says it is connected to more than 1.6 million homes while
Austar said in its first quarter results it had 755,641 subscribers
at March 31.
Consolidated Media said in a statement it would fund its
contribution of up to A$225 million for the takeover deal through a
newly arranged underwritten debt facility.
Foxtel said the takeover would be funded by a combination of
Foxtel bank debt and shareholder capital contributions in the form
of subordinated shareholder notes. Foxtel had secured committed
debt funding from Australia and New Zealand Banking Group Ltd.,
Commonwealth Bank of Australia, National Australia Bank Ltd. and
Westpac Banking Corp.
-By Gavin Lower, Dow Jones Newswires; 61-3-9292-2095;
gavin.lower@dowjones.com
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