News Corp. (NWSA:US), the world’s largest publishing company, will be allowed to take over Consolidated Media Holdings Ltd. (CMJ) in a A$2 billion ($2.1 billion) deal that may strengthen Rupert Murdoch’s hold on pay-television in Australia.
The proposed deal won’t be opposed as it is “unlikely to lead to a substantial lessening of competition” the Australian Competition and Consumer Commission said in a statement today. Consolidated Media’s controlling shareholder, billionaire James Packer, has already signaled his approval of News Corp.’s A$3.50 a share cash offer.
The decision gives News Corp. a head start on Seven Group Holdings Ltd. (SVW), the media and construction equipment group controlled by billionaire Kerry Stokes, which is also seeking regulatory clearance to bid. The ACCC said July 24 it would delay a decision on Seven Group being allowed to make an offer for Consolidated, which owns a 25 percent stake in Australia’s biggest pay-TV business Foxtel.
“If the ACCC ultimately decides that both companies could make this acquisition, then shareholders will be in the happy situation of having two media moguls slugging it out with open checkbooks,” Mark McDonnell, an analyst at BBY Ltd. in Sydney, said by phone before the announcement. Minority shareholders with 26 percent of the company probably won’t make up their minds until the ACCC has ruled on both offers, he said.
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