WIN owner could block takeover

23Oct07

Source: Miriam Steffens and Michael Evans, Sydney Morning Herald

BRUCE GORDON, the reclusive billionaire owner of WIN Television,
has swooped on a further 4.3 per cent of the Ten Network, securing
a blocking stake as market rumours emerged that Ten’s majority
owner CanWest had received a fresh approach for the
broadcaster.

Just four months after the Canadian media group failed to find a
buyer, Mr Gordon’s investment vehicle, Birketu, is understood to
have bought 40 million Ten shares at $3 apiece from an offshore
seller yesterday, taking its stake in Ten to above the 10 per cent
threshold necessary to block a takeover.

The Bermuda-based billionaire’s investment pushed Ten shares 10c
higher to $2.92, the highest close since June, when CanWest said
its nine-month search for a buyer of the broadcaster of
Australian Idol and The Simpsons had collapsed after
no one was willing to meet its price expectations.

The Canadian media group sought more than $3 a share for its
stake, while private equity firms including Blackstone and the
Carlyle Group were only prepared to pay between $2.70 and $2.80.
They were believed to be among the last bidders after Merrill
Lynch’s buyout unit and San Francisco-based Hellman & Friedman,
which is run by the former Publishing & Broadcasting chief
executive Brian Powers, pulled out over price concerns.

Mr Gordon, who owns the nation’s biggest regional broadcaster
WIN, acted on speculation that the Canadian media group had
received a revised bid at a level it would consider, possibly from
a combination of local and international buyout funds.

The bid would allow him to block a takeover, or use the stock to
get a seat at the table. Last month, Mr Gordon said Ten was
"probably worth a look at the cheaper price", and that he could be
convinced to team with a private equity firm or a "very friendly
bank" to buy Ten.

Mr Gordon was in Bermuda yesterday and unavailable for comment.
His son, the WIN executive chairman, Andrew Gordon, and the WIN
chief executive, George Papadopoulos, could not be reached. Birketu
had only recently cut its stake in Ten to 6.5 per cent, from 14 per
cent earlier this year.

There was also speculation that News Corp was considering
looking at Ten following the stock’s 11 per cent share slide this
year. Rupert Murdoch’s media empire was "rumoured to be interested
in leveraging Ten’s content for its online digital properties",
Goldman Sachs JBWere said.

Following the aborted sale process, CanWest converted its
economic interest in the broadcaster into shares in August, giving
it a 56 per cent stake in the network. With the ownership issue
resolved for the time being, analysts expected Ten to flag a
capital return of up to $400 million, and announce changes to its
board when it reports earnings for financial 2006-07 this week.

CanWest is expected to shrink Ten’s board from 11 to seven
directors, with the resignation of several long-term Australian
directors, including Laurence Freedman and Brian Sherman, and the
inclusion of the CanWest president, Leonard Asper, and Tom Strike,
who runs CanWest’s international businesses.

Margaret Fearn, a spokeswoman for Ten, declined to comment on
the board makeover yesterday, or to talk about the market
speculation about a potential new bid. A spokeswoman for CanWest in
Canada could not be reached.

Popularity: 1%