Consolidated Media Holdings (CMH) issued a media release today that a subsidiary of Seven Group Limited had requested a copy of CMH’s register of members and register of information about relevant interests.
According the media release, CMH will comply with Seven’s request pursuant to the Corporations Act.
This request by a Seven Group Limited subsidiary has fueled speculation that Seven will make a bid for James Packer’s pay-TV investment vehicle. CMH has a 25% stake in pay-TV provided Foxtel and a 50% stake in Premier Media Group, the producers of Fox Sports.
According to a report in Melbourne’s Herald Sun, analysts say Mr Stokes wants to wrest control of CMH because of its pay TV assets. This would allow Mr Stokes and his Seven Media Group to gain a strong foothold in the pay-TV market, building on their 33.3% stake in Sky News Australia. Especially given the failure of Stokes’ C7 pay-tv sports channels.
Seven chairman Kerry Stokes is expected to use the Corporation Act’s “creep rules”, which allow an investor who holds a 20 per cent stake in a company to purchase additional 3 per cent stakes every six months without making a takeover bid. Currently, Stokes’ Seven own some 20% of CMH as opposed to Packer’s 41% ownership of CMH.
At the close of the ASX today, Consolidated Media (ASX Code: CMJ) shares were up 7.03% to $3.305 and Seven Network Limited (ASX Code: SEV) were down 1.91% to $6.170 amid speculation of a takeover by the Seven Media Group.
As reported in Crikey, today’s developments “…would be Kerry Stokes moving his Queen’s bishop to attack. Your move James.”
The action is heating up from Stokes, Australia’s last remaining media mogul. What will James’ move be to ensure the Packer name remains a force in the Australian media sector?