For the Ten Network the next few days should see news on whether a buyout will happen, or whether the controlling CanWest group of Canada will reject any offer and convert its stake into a controlling holding of around 57 per cent.
Up to the end of the old legislation CanWest was limited to a voting stake of a fraction under 15 per cent compared to its economic stake of around 56.8 per cent.
A decision was expected around now in the original timetable from CanWest which also has its NZ media business, MediaWorks, on the market in a separate sale process.
CanWest decided to test the waters when it looked like the new media laws would come into force late last year after being approved by the Senate. The proclamation by the Government took a little while longer.
Ten is helping find a buyer with CanWest having undertaken to get an offer for the minorities should it accept an offer for its stake.
The second largest holder after CanWest is the WIN Group of Bruce Gordon and his family. That’s currently around 14 per cent.
It’s been suggested that he would work with News Corp to buy Ten but so far there has been no sign of that and WIN has been battling PBL Media for control of Nine stations in Perth, Newcastle and in Adelaide.
According to media reports there are just two front runners left for Ten: the US private equity giants, the Blackstone Group and the Carlyle Group.
The reports claim they could bid up over $3 billion, or as much as $2.90 a share for Ten, which would be knocked back in all probability as it would be 30c a share at least shy of where Ten shares have settled around the $3.15-$3.20 mark. CanWest wants $3 a share at least.
Other interest groups from Merrill Lynch and San Francisco-based Hellman & Friedman were reported to have withdrawn because they were concerned about the Ten price being too high. A buyout group worrying about price?
A third bidder is said to be the National Bank of Kuwait’s investment banking arm.
Ten shares have not performed well this year, falling around one per cent while the media index is up four per cent.
All the performance happened late last year in the great burst of speculative activity. Ten was largely left unscathed by that because of the uniqueness of its situation and concerns about its performance in the TV ratings and its earnings.
CanWest’s holding converts 455 million shares. Including net debt of half a billion dollars Ten is valued around $3.5 billion.
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Coles has a number of dates with destiny but the first that we know of at the moment is May 17 when the retailer is expected to release its interim earnings figures.
We already know that these are going to be awful: after all the deterioration in the company’s sales and earnings position in the months after the ‘Everyday Needs’ revamp last year is why the retailer is on the block, heading for break up.
The company has a bid from Wesfarmers and two private equity groups, Macquarie Bank, Europe-based fund, Permira and Pacific Equity Partners. That’s at $16.47.
But Macquarie Bank’s unsuccessful foray into the Coles market Tuesday night at $17.25 lifted the ante for the possible rivals, the KKR buyout group and a possible linking of Woolworths and the giant Tesco retail group from Britain.
Coles price is now the richest of all these may situations: over $21 billion.
There might be another six months of ‘dates’ to go but with its 12.8 per cent stake, Wesfarmers and its ‘friends’ still have the box seat.
The move by Woolies to get interested is understandable: it has always sought the easy way out to grow via acquisition and yet its superiority over Coles has come from its revamp of its logistics business which has taken time, energy and money.
That’s the difference between the two retailers, and nothing more.
To bring Tesco in might be clever but it does contain dangers for Woolies. The UK giant is bigger, has deeper pockets and could finance a price war to rebuild Coles basic supermarkets, liquor and petrol business.
Woolies is essentially renting out its shares to Tesco so they can match the capital gains tax saving rollover option of the Wesfarmers shares and cash option.
KKR has been talking (to its media mates) about offering a similar arrangement but that will increase costs quite sharply and introduce some external scrutiny should the KKR group win.
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For APN News and Media, its date with destiny is May 25.
That’s when shareholders are due to meet to consider a scheme of arrangement, which if approved, will see the Australian and NZ newspaper and radio group taken private by the major shareholder, Tony O’Reilly and two private equity partners.
It’s being blocked by Perpetual Trustees which yesterday revealed a slight fall in its holding to 13.36 per cent from 14.82 per cent. Argo Investments, which has a much smaller stake is another institution to oppose the offer.
O’Reilly’s Independent News and Media and its partners, Providence Equity Partners and Carlyle Group have lifted the takeover bid three times. There was one bid, which was withdrawn, then another at $6.05, then the last price.
The last and ‘final’ price of $6.20 a share was announced midway through last month in an effort to appease the dissenting holders.
“APN News & Media (ASX,NZX: APN) announced today that the consortium of Independent News & Media, Providence Equity Partners and The Carlyle Group has increased the price it is offering to APN shareholders under the proposed scheme of arrangement from $6.10 to $6.20 per share. The consortium has advised that this price is final.
“The Chairman of the Independent Committee of the APN Board, Mr Ted Harris, said: “The increased offer, which represents 13.1 times 2006 attributable EBITDA, pro
