If Seven West Media is unable to mount a counter-bid for Consolidated Media, it may lodge a joint bid for the Australian cricket broadcast rights, an analyst has predicted.
Seven will learn if it can counter News Limited’s $2 billion proposal on Thursday, when the competition watchdog is due to announce its findings on Seven’s request for clearance to acquire the 75 per cent of ConsMedia it doesn’t already own. Unless the ACCC’s announcement is postponed.
Commonwealth Bank analyst Alice Bennett said Seven could instead pursue a content‑sharing deal on cricket by using its 25 per cent blocking stake to secure a potential partnership with Foxtel or Fox Sports to bid for the Australian Cricket rights, which come up for renewal at the end of the coming summer season.
“We think the cricket would be on Seven’s radar, particularly after it missed out on the NRL rights,” Ms Bennett said in relation to Nine Network’s retention of the $1 billion-plus free-to-air National Rugby League rights.
Nine is the home of cricket having paid $315 million over seven years for the right to telecast tests, one‑day internationals and Twenty20 internationals in Australia while Fox has domestic competitions including the revitalised Big Bash League (BBL), the one‑day competition and the Sheffield Shield final.
Fox Sports could come under pressure from the free-to-air channels to retain all of the BBL rights; CommBank has previously said this alone could deliver governing body Cricket Australia an incremental $100m plus in a new five‑year deal.
ConsMedia confirmed last week it had received a binding proposal from News (publisher of The Australian) that would hand News a 50 per cent stake in pay TV operator Foxtel and 100 per cent of Fox Sports.
The $3.45-a-share bid values the company at $1.94 billion, below the $3.50 non-binding cash offer News lodged for the media investment company in June when News Limited chief executive Kim Williams announced the move.
Conditions of the indicative proposal announced in June 2012 have all been met including approval from the Australian Competition and Consumer Commission and the Foreign Investment Review Board.
Seven chief executive Peter Gammell said in August at Seven Group Holdings’ full-year result that it would wait for a formal News bid and the ACCC’s decision before determining its intentions.
"The timing is of their making," Mr Gammell told The Australian at the time in relation to News. "They've announced an intention to bid. When their intention becomes a real bid, then we will consider it. In order to evaluate any alternative you've got to be prepared."
CommBank considers a counter‑bid from Seven unlikely, and suggested Kerry Stokes’s media company may use its holding to drive up the price offered by News.
News executives consider the price fair and are hopeful Mr Stokes will acquiesce. Mr Packer last week said he considers the $1.94 billion proposal a “fair price”.
“We think Seven could use its blocking 25.3 per cent stake potentially as leverage to push News towards offering a higher price or to secure an interest in Foxtel and or Fox Sports.
Recall however that News has stated it is aiming to acquire 100 per cent of its offshore equity stakes where possible or divest,” Ms Bennett said.
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