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Foxtel picks up 15% stake in Australia’s Ten Network

MUMBAI: Australian pay TV network Foxtel will buy a 15 per cent stake in the struggling free-to-air media company Ten Network that is co-owned by mining heiress Gina Rinehart and media scions James Packer and Lachlan Murdoch among others.

The deal is subject to regulatory approval.

Ten Network will issue new shares to Foxtel to raise up to $77 million at $0.15 per share. This will make Foxtel own a 15 per cent stake in Ten. There is also a proposed renounceable entitlement offer to Ten shareholders to raise up to a further $77 million at the same price as the issue of shares to Foxtel.

New capital raised will be up to $154 million in total to reduce debt and provide additional financial flexibility. A Foxtel representative will join the board of Ten, which will be reduced in size to six directors.

Ten has appointed Multi Channel Network (MCN) as sales representative to gain scale, create efficiencies, improve data capabilities and provide broader integration opportunities for advertisers. MCN is the advertising sales JV between Foxtel and Fox Sports.

Ten has proposed to become a 24.99 per cent shareholder in MCN. MCN will start selling Ten television and digital advertising inventory from 1 September 2015. Ten has also proposed to have an option for two years to become a 10 per cent shareholder in online streaming service Presto.

Ten executive chairman, CEO Hamish McLennan said, “Today’s announcement represents an important milestone for Ten and the conclusion of the strategic review process initiated by the board last year. It positions Ten to drive long-term value for shareholders.

“The board believes the agreements with Foxtel and MCN will materially enhance TEN’s business and better equip it to respond to the challenges of the ever-changing media and advertising landscape. We welcome Foxtel’s proposed investment and we are confident this proposal will drive value for all of Ten’s shareholders.

“By joining forces with MCN, Ten will gain new efficiencies, improved data capability and provide broader integration opportunities for its advertising clients. The combined sales operation will provide advertisers a new way to reach consumers across all video content distribution platforms.”

Foxtel CEO Richard Freudenstein said, “With Foxtel’s local knowledge and expertise, and MCN delivering synergies and improved advertiser access, we are confident that this proposal delivers a robust long term solution for a revitalised, competitive and profitable Ten.”