The second meeting of Ten Network creditors has been moved to September 19, following a legal challenge by WIN owner Bruce Gordon.
The move follows an application in which Gordon, Lachlan Murdoch and 21st Century Fox asked the NSW Supreme Court to prevent Ten's administrators KordaMentha from holding the second meeting on September 12. The delay from September 12 allows time for a two-day hearing to examine claims of deficiencies in the administrators' report to creditors, and improves chances that Australian media law reform will have been passed in time for Gordon and Murdoch to improve their bid for the network.
• Previously: The CBS acquisition of Australia's Ten Network is under challenge today as Rupert Murdoch's 21st Century Fox joins a court action being taken by his son Lachlan and Bruce Gordon against administrator KordaMentha.
Like CBS, Fox is a creditor of the TV company, while shareholders Gordon and Lachlan Murdoch want to acquire it.
And the possible obstacle of media law reform may be overcome as the Nick Xenothon Team is said to be "on the verge" of agreeing terms for its support.
Lawyers for Fox and the bidders are expected to argue that this week's Korda Mentha report to creditors was deficient in several respects, including the failure to present alternatives to the CBS bid, liquidation or the resignation of the administrator.
A second meeting of creditors is scheduled for September 12.
• As Ten Network's biggest creditor, CBS was always in pole position to acquire the troubled business if it wanted: Apparently it does.
While the focus has been on whether Lachlan Murdoch and Bruce Gordon could devise a workaround to address delays in media law reform, the US content giant has moved in with an offer and promise of immediate financial support.
If the deal proceeds - as seems likely - heads are set to roll in the Murdoch camp as executives from the top down ponder, "How did we let this happen".
In a statement this morning, Ten's receivers and managers - Christopher Hill, Phil Carter and David McEvoy of PPB Advisory - and voluntary administrators - Mark Korda, Jarrod Villani and Jenny Nettleton of KordaMentha Restructuring -announced that they have signed a binding transaction document for subsidiaries of CBS to acquire Ten's business and assets.
The New York Stock Exchange-listed media giant is understood to be owed $843 million, making it the network's biggest single creditor. Most of its debts are unsecured, including the drawn balance owed to the Commonwealth Bank and previously guaranteed by Murdoch, Gordon and James Packer, and the $12.4 million owed to Endemol Shine, a subsidiary of 21st Century Fox and sister company of News Corp Australia.
Ten Network is understood to have secured creditors owed $129 million and accumulated losses of $1.3 billion.
As the owner of businesses in the media and entertainment industries including the CBS Television Network, cable networks, content production and distribution, television stations, internet-based businesses, and consumer publishing, and with a current market capitalisation of approximately US$28 billion, CBS Corporation is a major competitor of 21st Century Fox, which - like News Corp - is controlled by Lachlan's father Rupert Murdoch.
The statement says the transaction contemplates an acquisition "effected by way of a refinance of existing secured debt arrangements (including shareholder guarantor fees) in full and a Deed of Company Arrangement that will be put to creditors at the second creditors meeting".
The outcome is expected to provide a return to creditors and details of this and the timing of a second meeting of creditors is to be provided by the voluntary administrators in a report to be released "in coming days".
"The decision to enter an exclusive transaction deed with CBS followed a rigorous sales process run in conjunction with independent adviser, Moelis Australia Advisory."
Network Ten receiver and manager and PPB Advisory partner Christopher Hill says the sale to CBS "will allow the iconic broadcaster to move into a new chapter on a strong and stable footing.
Administrator Jarrod Villani of KordaMentha Restructuring sais the receivers and administrators would work closely together to ensure that operations continue uninterrupted while the transaction is finalised.
"As part of the agreement to purchase the Network Ten business, CBS will provide immediate financial support to ensure continuity of operations ahead of the upcoming meeting of creditors."
Ten says the deal is "only subject to certain limited conditions" including Foreign Investment Review Board approval and compulsory transfer of shares in Ten to CBS through a section 444GA process, which will require Australian Securities and Investment Commission relief to permit the transfer and an order made by the Court under section 444GA of the Corporations Act.
CBS Studios International president and chief executive Armando Nunez says his company is committed to the "efficient, reliable and successful turnaround, operation and development of Ten to support continued growth in Australian media.
"This acquisition not only presents CBS with considerable broadcasting opportunities in Australia, but also allows for further multi-platform distribution and growth."
Apart from its major role as a content provider, CBS owns a third of the Eleven digital channel with Ten.
"CBS and Ten have had a strong relationship for a number of years," says Ten chief executive Paul Anderson. "We are very excited about further developing that relationship with CBS as an owner, and strength that they will provide to the Company at this critical time."
Peter Coleman
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