Here's why Ten Network Holdings Limited is on the nose today

Ten Network Holdings Limited (ASX:TEN) shares opened lower today as media speculation swirls around a potential takeover.

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Shares of embattled free-to-air media company, Ten Network Holdings Limited (ASX: TEN), slid 2.3% at market open this morning following speculation that one of its potential suitors, Discovery Communications Inc. may have pulled out of takeover talks.

As reported by Fairfax Press, a joint-venture between Discovery and Foxtel – owned by Telstra Corporation Ltd (ASX: TLS) and News Corp (ASX: NWS) – was set to acquire the main assets of the Ten Network.

However, speculation is mounting that the US media giant has walked away from talks. According to The Australian Financial Review, it is believed the company has been become "frustrated" with the process and media coverage surrounding the potential deal.

Ten Network shares opened this morning around $0.22.

Last year, when Foxtel and Discovery decided to enter discussions with Ten Network, it was believed the joint-venture's offer would be for a price around 26 cents per share. However, after conducting rigorous research, the offer price dropped to 23 cents per share.

Under the deal, Foxtel would acquire 14.99% of Ten Network and Discovery would hold the rest.

However, there are many influential investors on Ten Network's share registry, with some calling for different strategies to revive the struggling company. Billionaire Bruce Gordon and Lazard Asset Management have previously been opposed to the joint-venture deal.

Mr Gordon had previously offered to inject between $70 million and $100 million of capital into Ten Network if he could control two board seats. This would effectively double his holding. Ten Network, however, is disinclined to allow Mr Gordon such control over the company.

Last week, Ten Network's board is rumoured to have approached the joint-venture with a new deal which would see each company hold 14.99% following a private share placement, but it is believed Discovery wants full control of the company.

In response to the speculation, Ten Network issued an ASX announcement this morning stating: "As previously announced, an Independent Board Committee of TEN is considering a number of transaction proposals which vary in type and value and remain confidential, non-binding and conditional in nature. Discussions are continuing with various parties and may or may not result in a transaction which is acceptable to TEN."

What should retail shareholders do?

As yet, it appears no one knows whether a deal will, or won't, go ahead. To adjust for the uncertainty, investors should demand a healthy premium between the price they can buy shares and the price which they believe will be offered under a takeover.

After all, Ten Network is operating in a structurally declining market. Therefore, for retail shareholders, now could be a better time than ever to sell your shares and look for better opportunities (see below).

Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any of the companies mentioned. Owen welcomes your feedback on Google plus (see below) or you can follow him on Twitter @ASXinvest. The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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