Murdoch, Packer stop Hellman & Friedman Ten bid
In a piece of corporate high drama as engaging as any episode of Bondi Rescue or its other major shows, Australia’s Ten Network saw media magnates James Packer and Lachlan Murdoch take up a joint 18% blocking stake in its parent Ten Holdings to head off an ostensible privatization bid being hatched by Nick Falloon, its executive chairman, and Brian Powers, his former boss and now chairman with leading US TMT PE firm Hellman & Friedman.
Falloon duly offered his resignation, while welcoming Packer and Murdoch to take up the two board seats presented them by Ten Holdings. “The Board looks forward to James Packer and Lachlan Murdoch also agreeing to join the Board as previously offered,” he said publicly.
The Ten Board has since neither confirmed nor denied that Falloon was working with H&F on any bid, but there might be compelling opportunities for a PE investor with appropriately committed inside support to improve the business. “There is a way to create value in Ten that I don’t think was being executed properly,” remarked one Australian GP to AVCJ. “It’s very interesting at a certain price.” Other PE firms, formally and informally, have looked at the asset before, according to market talk.
Australia has seen similar moves by its leading business figures in past buyouts. In 2007 Solomon Lew took up a blocking position in Affinity Equity Partners’ attempted takeover of clothing chain Colorado Group, before relinquishing the stake at a profit. Murdoch and Packer’s motives appear more strategic, however. Powers, meanwhile, would certainly have known the execution risks in attempting a move on Australia’s highly oligopolistic media turf. He formerly worked in Australia as MD and CEO of both Packer’s Consolidated Press Holdings (CPH) and Murdoch’s PBL. Falloon himself worked under Powers at Australia’s Channel Nine.
H&F, which declined to confirm its involvement to AVCJ, has previously been active in Asia Pacific, opening its Hong Kong office in 1992. Its past exits included the almost $394 million sale of Australia’s Hoyts Cinemas – to CPH – in 1999. However, the firm shuttered its Hong Kong office in 2002, and has not since done any deals here..
Powers has also served in Hong Kong with Jardine Matheson and HSBC, and further H&F moves into Asia Pacific under his chairmanship are still conceivable. Other reports speculated that Falloon and H&F might now jointly bid for heavily-indebted CVC investee PBL Media.
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