Foxtel announced it would invest up to $77m in Ten Network Holdings Limited as part of a broader equity raising by Ten. Depending on the outcome of the Entitlement Issue to Ten shareholders, Foxtel will acquire a position of up to 15 percent of Ten’s diluted share capital.
According to a release by Foxtel, as part of this transaction Ten is to take a 24.99 percent equity position in Multi Channel Network (“MCN”), the advertising channel joint venture between Foxtel and Fox Sports. MCN has separately signed a sales representation agreement with Ten where it will act as the Company’s advertising sales agent. This collaboration is expected to provide Ten with synergies and improved access to advertisers.
In addition, Ten will have an option for two years to become at 10 percent shareholder in Presto TV Pty Limited. Foxtel will nominate a director to the Ten Board as part of this transaction.
Foxtel’s Chief Executive Officer, Richard Freudenstein, said, “We believe our investment in Ten is a win-win for Ten and Foxtel. With Foxtel’s local knowledge and expertise, and MCN delivering synergies and improved advertiser access, this proposal delivers the best long-term solution for a revitalised, competitive and profitable Ten.” Each of the proposals, other than the sales representation agreement, is subject to regulatory clearances including by the ACCC.
Ten has struggled to keep viewers from switching to rivals and it has suffered years of declining ratings and advertising revenue. This deal will end an eight-month sale process after Ten appointed Citigroup to help it assess takeover approaches, back in November.
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