SYDNEY (Reuters) – Two Australian media moguls have lost a court challenge to CBS Corp’s (CBS.N) planned buyout of bankrupt television broadcaster Ten Network Holdings Ltd (TEN.AX), allowing the CBS deal to be put to a creditor vote on Tuesday.
CBS surprised the Australian media establishment when it offered as much as A$201.1 million ($160.96 million) for Ten, which went into administration three months ago after a long-term decline – an offer that was quickly accepted by Ten’s administrator.
Media scion Lachlan Murdoch and business partner Bruce Gordon had been widely expected to acquire Ten but their bid had been held up as they waited for reforms to laws on the ownership of multiple types of media assets – reforms that were only voted through by the Australian Senate on Friday.
Lachlan Murdoch, executive chairman at Twenty-First Century Fox (FOXA.O) and Gordon submitted a revised offer on Friday, although its total value has not been disclosed.
But on Monday, an Australian judge dismissed arguments by lawyers for Gordon and Fox that the administrator, KordaMentha, mishandled the sale because it did not explain to other creditors why it preferred the CBS bid. They had also sought to block CBS, Ten’s biggest creditor, from voting on its own bid at Tuesday’s meeting.
“I am not satisfied CBS should be prevented, in advance, from voting at the meeting,” Justice Ashley Black said in his ruling at the New South Wales Supreme Court, adding he was not satisfied that there had been “any deficiencies” in the administrators’ communication with creditors.
“For these reasons [the case] should be dismissed,” he said.
A spokesman for Kordamentha said that the Tuesday meeting of creditors will also vote on whether to consider the revised bid made by the media moguls.
Spokeswomen for Gordon and Lachlan Murdoch had no immediate comment.
Although a ratings laggard, Ten’s national reach and strong brand recognition in the world’s 12th-largest economy have made it an attractive buyout target.
($1 = 1.2503 Australian dollars)
Reporting by Tom Westbrook; Editing by Edwina Gibbs