Packer to sell interest in CMH to News Corp

BILLIONAIRE JAMES Packer has moved to sever his family’s long association with the media sector by agreeing to sell his interest in Australia’s biggest pay-television company to Rupert Murdoch’s News Corp for two billion Australian dollars.

Mr Packer said he would support News Corp’s proposed offer for Consolidated Media Holdings (CMH), which owns 25 per cent of Foxtel, Australia’s biggest pay-TV company, in the absence of a superior bid. The all-cash deal, which is subject to regulatory approvals, will strengthen News Corp’s grip on the Australian pay TV market by doubling its holding in Foxtel and delivering full control of Fox Sports Australia, which owns the broadcast rights for Australian rules football. Mr Packer is the majority shareholder in CMH with 50 per cent while billionaire Kerry Stokes’ Seven Group Holdings has a 24 per cent stake.

CMH is the last media asset Mr Packer inherited from his father Kerry Packer and a sale would effectively end the Packer family’s interest in the Australian media sector. The rest of the family’s TV and publishing empire has been sold, with Mr Packer retaining a personal 10 per cent holding in broadcaster Ten Network.

News Corp is keen to expand in pay-TV assets, and Chase Carey, chief operating officer, has made clear the company is looking at businesses where it has only a partial stake to see if it can gain full control or whether it should sell its investment.

The bid for CMH, pitched at A$3.50 a share, a 14 per cent premium to Tuesday’s closing price and which analysts described as well timed, comes as Mr Packer looks to reach an agreement with Echo Entertainment, a rival Australian gaming group valued at almost A$3billion.

He wants to use Echo’s exclusive casino license for New South Wales to build a A$1 billion six-star hotel and casino in Sydney to attract high-rollers from Asia – in particular, China.

But Mr Packer faces a potential challenge from cash-rich Malaysian gaming group Genting, which has amassed a 10 per cent holding in Echo, matching Mr Packer’s stake. Analysts believe Genting could be set to make a takeover offer, which Mr Packer would struggle to match.