As we wrote just over two weeks ago, upcoming regulatory changes have kicked the media sector into action with a host of deals announced since then.
Today, Nine Entertainment Co Holdings Ltd (ASX: NEC) grabbed hold of 9.99% of Southern Cross Media Group Ltd (ASX: SXL) from Macquarie Group Ltd (ASX: MQG). Macquarie had held around 26% of Southern Cross before the deal.
Nine can’t yet go over the 10% mark due to existing rules, but positions the company for a potential takeover of Southern Cross, if and when the new rules come into effect.
Interestingly, Southern Cross is a regional broadcaster for Nine’s two major metropolitan competitors, Seven West Media Ltd (ASX: SWM) and Ten Network Holdings Ltd (ASX: TEN). Nine’s stake in Southern Cross could also serve another purpose – to block a takeover of the company by either Seven or Ten (or anyone else for that matter).
Billionaire Bruce Gordon — who owns WIN Corporation, Nine’s regional affiliate partner — recently entered an arrangement with Deutsche Bank to acquire 4.3% of Nine. He already owns 14.99% of Nine, and has a similar stake in Ten. Nine and WIN recently extended their affiliation agreement to the end of June 2016.
Seven’s regional affiliate Prime Media Group Limited (ASX: PRT) appears highly likely to end up in the lap of Seven – with billionaire Kerry Stokes holdings stakes in both companies.
And moves are not just taking place in the free-to-air television space. Fund manager Henderson Global Investors reported today that it had picked up more than 116 million shares or 5.05% of Fairfax Media Limited (ASX: FXJ). The manager appears to think that Fairfax is a potential takeover target. Apart from property portal Domain, Fairfax also owns a number of Australia’s most visited websites, including The Age and the Sydney Morning Herald, which might be highly attractive to prospective buyers.
Then yesterday, Telstra Corporation Ltd (ASX: TLS) was reported to be considering listing its 50% share of pay TV operator Foxtel on the ASX. News Corp (ASX: NWS) owns the other 50%, and it too may want a bigger slice of Australia’s media sector.
There’s no doubt Australia’s media sector faces a massive upheaval if the new regulations are released, with some players staking substantial sums that they will definitely go ahead.
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