James Packer’s PBL Media has blown its rival, WIN, out of the water with a quarter of a billion dollar bid for Nine Network northern NSW regional affiliate, NBN, presently owned by the listed company SP Telemedia.
SP Telemedia revealed yesterday that it “has entered into an agreement with PBL Media Pty Limited to purchase the Company’s media assets, including NBN Television and its outside broadcasting and production operations (trading as One80 Digital Post).
“The total offer consideration for the assets is $250 million.
“After a thorough sale process, the directors of Soul carefully considered all proposals received from interested parties and concluded that the offer from PBL Media was superior and provided the best outcome for all Soul stakeholders, both in terms of value and deliverability.”
WIN, owned by billionaire Bruce Gordon, is thought to have bid around $230 million. WIN owns around 12 per cent of SP Telemedia so it stands to make around $30 million if there is a full capital return to shareholders.
Both PBL Media and WIN have started talking to Southern Cross Adelaide about its station, NWS 9. It was bought by Southern Cross for $98 million years ago. Adelaide is the worst performing of the five major metro markets but NWS 9 could be expected to be sold for around $150 million, if PBL Media really wants it.
The Packer interests have bid $136 million for the loss making STW 9 in Perth but WIN has topped that with a $163.2 million offer which appears a little cheap given the NBN price.
SP Telemedia said its major shareholder, Washington H. Soul Pattinson & Company Ltd, has also indicated to the company that it is in support of the offer.
“Following the sale of its media assets, the company will focus on its high growth telecommunications operations, multi-media capabilities and media infrastructure assets.
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“The company is confirming whether shareholder approval of the sale is required and expects to be able to advise the market shortly if this will be necessary.
SP Telemedia said on Monday that in view of interest in its media assets, it was giving interested bidders until 5 pm Monday to make an offer. PBL Media was granted an exclusive due diligence period on April 23.
WIN had put in one offer that was rejected and submitted a second late last Friday which led to Monday’s deadline being imposed.
WIN’s bid for STW9 in Perth of $163.2 million has the reluctant endorsement of the Sunraysia TV board
PBL Media,bid a knock out price for NBN: it can now attempt to do a deal with WIN because its ownership of NBN makes more sense than with PBL Media.
There would have to be a deal covering Adelaide and Perth Nine stations and a new affiliation agreement between WIN and PBL Media which seems to have been a real bone of contention.
PBL Media wants WIN to pay more for being a Nine affiliate: it currently pays Nine around 34 per cent of its revenue: PBL Media wants this lifted to around 50 per cent or a 20 per cent share of Nine Network’s production costs, whichever is higher..
WIN has said no and launched bids for STW to pressure the Packer camp and then moved on its fellow regional affiliate NBN by approaching the board of SP Telemedia. This has forced the Packer camp to more than double the amount it planned to spend on expanding the Nine Network.
It will now have to lift that amount again if it wants to top WIN in Perth.
PBL Media has now committed itself to spend more than $386 million on assets that were not supposed to be important. A bid for Adelaide would take that up to around half a billion or more.
SP Telemedia closed up 4.5c yesterday at $1.01.
