Ten Network (TEN) shares fell to 22.5 cents yesterday, a fall of 6.25% on the day, and nearly 14% since November 26.
It is a fall which tells us investors think the ’takeover battle’ for the company is verging on the absurd and they are not convinced it will happen.
Ten’s independent directors could always reject the offer various offers – although it seems there is at least one offer for a change of control and others for a refinancing to get rid of the $200 million loan from the Commonwealth bank.
The whole point of a takeover is to get a bid which can convince shareholders to sell – it is extremely unusual when putative bidders cut their offers (although the bidders for Goodman Fielder did just that, but then Goodman Fielder is not the usual company – its track record so far as earnings growth and surprises is not exemplary. But at least it is earnings positive, unlike Ten).
Ten actually issued a statement yesterday morning saying “Citigroup has received non-binding, conditional proposals from a number of parties in relation to transactions which, if implemented, could result in a change of control of Ten or a refinancing of its existing debt facilities."
"An independent committee of the Board of Ten will now consider those proposals in conjunction with Citigroup. In this regard, it should be noted that the proposals are confidential, non-binding and conditional in nature and may or may not result in a transaction which is acceptable to the Company.
"Ten will update ASX again when required to so under its continuous disclosure obligations. In the meantime, Ten urges caution in dealing in its shares on the basis of media speculation about potential transactions involving the Company.”
“Media speculation’, that’s rich coming from a company which seemingly has been so porous as to detail of possible bidders that a new name seemed to emerge every month or so earlier this year.
TEN YTD – Fierce battle unlikely for ailing Ten
So we don’t know how many actual proposals/bids have been received, or how many offers to refinance the $200 million CBA debt noose.
Still time for a query from regulators to get a bit more information,e specially when we will no doubt see more detail appear in the print media about these “proposals”
But the grown ups are clearly not involved in this dealing. Numerous leaks, a lack of transparency and weak ratings and financial performance from Ten, has made this corporate situation into a confused mess.
Still those clever folk, the quartet of billionaires who control Ten’s fortunes, are staring down the barrel of losses of more than half a billion dollars, which is no mean feat seeing at 22.5 cents.
Ten’s market cap is worth $692 million, which means the losses incurred by the likes of Lachlan Murdoch, James Packer, Gina Rinehart and Bruce Gordon, are substantial, but not crippling.
The losses of Bruce Gordon, the owner of Nine regional TV affiliate, WIN, who owns 14.9% of Ten are harder to work out.
Mr Gordon has built his stake during 10 years, buying at a variety of prices, between $3 and $4 at one stage.
US cable TV giant Discovery Communications and Foxtel have chopped their original indicative offer for Ten because they are concerned about the health of the company. Their “offer” is down to the range of 20 to 25 cents from up to 30 cents a share.
The success of any takeover is conditional upon approval from the Australian Competition and Consumer Commission.
Lachlan Murdoch is said to be an eager seller of his 8.5% stake, which is now worth $53.16 million from a total outlay of about $166.6 million. He just wants to be rid of Ten.
