-- News Corp. seeks to buy Consolidated Media for A$1.97
billion
-- Regulator says deal unlikely to lead to substantial lessening
of competition
(Adds analyst comments in seventh, eighth and tenth
paragraphs)
By Gavin Lower
MELBOURNE--The Australian Competition and Consumer Commission
said Thursday it wouldn't oppose News Corp.'s (NWS.AU) 1.97 billion
Australian dollar (US$2.06 billion) bid for media investment
company Consolidated Media Holdings Ltd. (CMJ.AU).
"The ACCC's view is that this acquisition is unlikely to lead to
a substantial lessening of competition in any relevant market,"
ACCC chairman Rod Sims said in a statement. News Corp. lobbed its
bid for the company, aimed at strengthening its pay-TV presence in
Australia, in June.
Consolidated Media owns 25% of Australia's largest
pay-television company Foxtel and 50% of sports channel Fox Sports.
News Corp. also owns 25% of Foxtel and the remaining 50% of Fox
Sports.
Australian casino mogul James Packer, whose Consolidated Press
Holdings owns 50% of Consolidated Media, has previously welcomed
the bid and described News Corp.'s A$3.50 a share bid as
"fair."
The deal also depends on support from Consolidated Media's other
major shareholder, the Kerry Stokes-controlled Seven Group Holdings
Ltd. (SVW.AU), which owns 24% of the company.
A spokesman for Seven Group declined to comment, while
spokespeople for News Corp.'s Australian unit News Ltd.,
Consolidated Media, and Consolidated Press were unable to be
reached for comment.
Justin Diddams, a media analyst at Citi, said the ACCC's
decision meant the deal was a step closer to completion "but
there's still a question mark over what Kerry Stokes wants to do
with his 24% stake."
"It's time for Packer, (News Corp. chairman and chief executive
Rupert) Murdoch and Stokes to sit down and negotiate a deal," Mr.
Diddams said.
Seven Group, which owns 38% of Seven West Media Ltd. (SWM.AU),
the owner of Australia's most popular free-to-air television
broadcaster the Seven Network, has asked the ACCC to consider its
own proposal to acquire Consolidated Media, which the ACCC is
currently assessing.
Mr. Diddams said Seven Group's proposal to acquire Consolidated
Media, which would bring the Seven Network and Foxtel closer
together, could face concern from the ACCC over excessive power in
bidding for content such as sports broadcast rights.
Mr. Sims said in Thursday's statement that given News Corp. had
no interest in other free-to-air or pay-TV entities in Australia,
the ACCC considered the proposed acquisition "was unlikely to
materially change News Corporation's incentives in relation to the
supply of content in Australia."
News Corp. is the owner of this newswire and The Wall Street
Journal.
Write to Gavin Lower at gavin.lower@wsj.com
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