US broadcaster CBS's bid to buy Australia's third-largest television network was approved by creditors and staff Tuesday, paving the way for the takeover despite a rival offer by media mogul Lachlan Murdoch. The tussle for the embattled Ten Network came after it went into voluntary administration in June when two billionaire backers - Murdoch and Bruce Gordon - refused to continue guaranteeing a key loan.
CBS sealed the deal with Ten's administrators KordaMentha last month, but reportedly sweetened its bid late Monday after a higher proposal by News Corporation co-chair Murdoch and Gordon, the owner of regional network WIN. "On the number, it was an overwhelming vote in favour of CBS," administrator Mark Korda told reporters.
"I think the industry is genuinely excited about having a Aus$27 billion (US$22 billion) big brother looking after Channel Ten." Korda said he expected Australia's Foreign Investment Review Board, which has to approve the bid, would announce its decision by the end of September and the acquisition, which also requires court approval, should be finalised in "four to five weeks". Christopher Hill, a partner at Ten's receiver PPB Advisory, said the support for CBS's offer "ensures the iconic broadcaster continues on a strong and stable footing".
Gordon on Monday failed in a court bid to delay the CBS takeover, arguing that his offer with Murdoch had not been properly considered. It is not yet known if he will appeal. Any takeover by Murdoch's investment company Illyria and Gordon's Birketu would be dependent on the government changing media laws to allow ownership across multiple platforms.
The controversial media law changes passed their first hurdle last week when they were approved by the upper house Senate. They are expected to come into force when the lower House of Representatives, where the ruling coalition has a one-seat majority, sits again in mid-October. Murdoch, the son of media giant Rupert, and Gordon on Friday said their maximum payment to unsecured creditors would be Aus$55 million, above CBS's offer.
But the US network reportedly lifted its offer to unsecured creditors to Aus$40.58 million from Aus$32 million ahead of the meeting, The Sydney Morning Herald reported. Ten, which has been on air since 1964, has struggled with slumping advertising revenues like other Australian and international media organisations.