Bruce Gordon’s Win Corporation has lifted its offer for Perth Nine Network TV station operator, Sunraysia TV, to a serious amount, putting it in direct conflict with James Packer’s PBL Media.
And there are signs WIN is close to buying fellow NSW Nine TV affiliate, NBN from SP Telemedia.
And elsewhere in the media there are reports of meetings between Southern Cross Broadcasting and Macquarie Media Group. Both stocks fell in yesterday’s solid market.
In a letter to Sunraysia and the ASX late last night, WIN said it was lifting its offer from a net $146.2 million to a new figure of $163.2 million.
That’s $27 million more than the $136 million offered by PBL Media in a deal accepted by the directors of Sunraysia late last week.
It is around $38 million more than the gross figure for the valuation of the Perth Nine TV licence by STV directors of some $115 million.
Directors of STV rejected the last offer for various reasons, the most important being a request by WIN that the major shareholder and chairman and CEO of Sunraysia, Eva Presser, indicate if she would be participating in a buyback of STV shares once the sale had gone through.
She refused saying that could expose STV to a move by WIN to grab control and she had yet to consider the tax and other implications of a buyback.
The PBL Media offer was accepted because the first WIN offer did not offer enough to take account of possible extra charges for any warranty breaches and other costs involved in the PBL offer.
After considering the financial impact of these possible future costs directors said the difference between the net price offered by WIN has not sufficiently ahead of their valuation of the licence to warrant being accepted.
But the real sticking point between the two parties was the long animosity between Ms Presser and her interests who have controlled STV for 15 year or so, and WIN, who has been locked into a minority shareholder position (with almost 44 per cent) with no board representations and at least one spurned takeover offer.
Ms Presser really feared that Mr Gordon and WIN would swoop to snatch control if she indicated she and her associates would be taking part in the buy back proposed by STV, once the sale money had been received.
After the rejection late last week WIN said it would look again at STV and the reasons advanced by directors and probably produce a new offer as soon as possible.
That came last night and WIN says the new bid effectively values STV at $14.29 a share, compared to the $11.96 in the PBL Media offer and a market price of $13.50. One thousand shares were traded yesterday at that price.
WIN also said it was now not pressing ‘its prior requirement that Ms Presser confirm the extent to which shareholders associated with her will participate in the buy-back proposed by Sunraysia directors.”
WIN says that if the latest offer is not executed by Sunraysia and its subsidiary, Swan TV (which holds the licence for STW 9) “by 5 pm Friday April 20” it will lapse.
That gives Ms Presser and her board associates the opportunity to ignore the WIN offer until Friday and let lapse.
Sunraysia has called a shareholders meeting for next Tuesday in Melbourne. If the higher WIN offer is allowed to lapse or rejected there will be questions asked.
What will be of interest now is whether PBL Media steps in with a higher offer or allows Ms Presser to allow the WIN offer to lapse.
The takeover battle is a sign of the fractured relations James Packer and his executive team are facing as they seek to rebuild earnings at the Nine Network.
