CBS CBS Corp

By Rob Taylor 

CANBERRA, Australia--Creditors of Australia's Ten Network Holdings Ltd. accepted an increased offer for the insolvent broadcaster from CBS Corp., rejecting a rival proposal from media moguls Bruce Gordon and Lachlan Murdoch, and handing the U.S. media giant a victory as it seeks to expand its international reach.

CBS sweetened its bid by offering more money to unsecured creditors, lifting the overall value of the deal to around A$209.7 million (US$166.9 million), according to Ten Network's administrator, insolvency specialists KordaMentha.

"The creditors have had their vote and they have accepted a future for Ten with CBS," Mark Korda said Tuesday. "I think the industry is genuinely excited about having a US$27 billion big brother [like CBS] looking after Channel Ten."

The deal could be completed by October, he said, if it receives foreign-investment approval from the Australian government as expected.

The revised CBS bid for Ten Network came after Messrs. Gordon and Murdoch, who made a fresh offer for the network last week, lost a court challenge to the proposed deal on Monday. The court decision cleared the way for the creditors' vote on Tuesday.

KordaMentha had previously recommended CBS's initial proposal, saying the deal offered the best value. Mr. Korda said Tuesday that CBS's revised offer still had the least execution risk, although Messrs. Gordon and Murdoch may still challenge the deal through a court appeal.

Ten Network last year posted losses of A$157 million and was placed into voluntary administration in June, with debts of A$609 million. New York-listed CBS, Ten Network's biggest unsecured creditor, launched a bid for the company with plans to introduce its on-demand streaming service in Australia on a trial basis. The service, CBS All Access, is aimed at countering media challengers like Netflix, Amazon Prime and HBO.

The offer derailed a joint bid from Mr. Murdoch-- 21st Century Fox's executive chairman and co-chairman of News Corp, which publishes The Wall Street Journal--and his business partner Mr. Gordon, who controls a company that owns regional broadcasting licenses across Australia.

Fox is Ten Network's second-largest creditor and is owed about A$125 million, while CBS is owed around A$350 million.

Despite struggling with debt, Ten Network--Australia's least-watched commercial network--has been an attractive target with national reach and a youthful audience, many of whom had been drawn by hit CBS drama offerings like CSI and Hawaii Five-O that air on its network.

The CBS offer, Mr. Korda said, had also been accepted by Ten Network employees, as required under voting rules. "On the numbers, it was an overwhelming vote in favor of CBS," he said.

Documents lodged by CBS with the administrator showed unsecured creditors would receive just over A$40 million--up A$8 million from CBS's earlier bid and compared with A$55 million offered by Messrs. Gordon and Murdoch.

The battle for Ten Network comes after several difficult years for Australia's traditional media outlets because of falling advertising revenue as audiences embrace digital platforms.

Australia's parliament last week responded to pressure on media companies by abolishing controls that had prevented free-to-air television networks like Nine Entertainment Co., Seven West Media Ltd. and Ten Network from snapping up regional affiliates.

Lawmakers also abolished a rule that prevented large media companies from controlling free-to-air TV stations, newspapers and radio in the same market, changes that are likely set to trigger many mergers.

Write to Rob Taylor at rob.taylor@wsj.com

(END) Dow Jones Newswires

September 19, 2017 03:56 ET (07:56 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.