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Foxtel takes Ten stake

Australian pay-TV operator Foxtel has agreed to buy 15 per cent of Australian commercial broadcasting service Network Ten in a A$77 million deal as part of a capital raising that could raise up to A$154 million.

Ten has proposed issuing new shares to the subscription-TV provider at A15c (€0.10) a share in exchange for a 15 per cent shareholding. A Foxtel executive will join the board of Ten, which will be reduced in size to six directors from ten.

The free-to-air network will also sell new shares in a separate A$77m capital raising at the same price as the issue of shares to Foxtel in a renounceable entitlement offer.

The new capital will be used to reduce debt and provide funds for programming and other investments.

Ten has appointed pay-TV sales house Multi Channel Network (MCN) to sell advertising on its behalf, saying that by joining forces with MCN, it will gain new efficiencies, improved data capability and provide broader integration opportunities for its advertising clients, with the combined sales operation providing advertisers a new way to reach consumers across all video content distribution platforms.

The move will see Ten become a shareholder in MCN, taking a 24.99 per cent stake. It will also have an option for two years to become a 10 per cent shareholder in online streaming service Presto.

Ten chairman and chief executive Hamish McLennan said the deal represented an important milestone for Ten and the conclusion of the strategic review process initiated by the Board last year.

“It positions Ten to drive long-term value for shareholders. The board believes the agreements with Foxtel and MCN will materially enhance Ten’s business and better equip it to respond to the challenges of the ever-changing media and advertising landscape,” he stated. “We welcome Foxtel’s proposed investment and we are confident this proposal will drive value for all of Ten’s shareholders.”

Foxtel CEO Richard Freudenstein described the proposed investment in Ten as “a win-win” for Ten and Foxtel.

“With Foxtel’s local knowledge and expertise, and MCN delivering synergies and improved advertiser access, we are confident that this proposal delivers a robust long term solution for a revitalised, competitive and profitable Ten,” he concluded.

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