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By Mike Caggeso
Consolidated Media Holdings Ltd., Australia's second-largest media company, is entertaining a very generous buyout offer from Lachlan Murdoch, eldest son of media tycoon , and James Packer, Australia's richest person and son of late media tycoon Kerry Packer.
The duo offered $2.9 billion to privatize Consolidated Media, which is 24% higher than the stock's last traded price. Packer is the company's executive chairman of the board and owns 38% of the company, Bloomberg reported.
Under the deal's terms, Murdoch's private company's Illryia Pty. Ltd., and co-investors would own 50% of Consolidated Media. Consolidated Press, the Parker-led investment company, would control the other 50%. Lachlan, however, would become the company's executive chairman.
"It's a huge premium to pay but we'll pay it because we like the businesses and I think I can add a lot of value," Murdoch said in an interview with The Wall Street Journal.
Consolidated Media has four operational segments: gaming, television, publishing and ticketing and events. It was formed last year from Packer's former Publishing & Broadcasting unit when he split from his casino operations, the Journal said.
If Consolidated Media accepts the offer, it will expand the reach and influence of the famed Murdoch family's media dynasty. Lachlan's father is Chairman and CEO of News Corp. (NWS), which recently purchased the Dow Jones & Co., publisher of The Wall Street Journal. The company's assets also include television stations, magazines and newspapers around the world as well as social networking site, MySpace.
Sensing media outcry, the Journal went out of its way to say that Murdoch's Consolidated bid was independent of News Corp., as he quit his management role with the company in 2005, though he still remains on the company's board.
The Journal even noted that the last time the younger Murdoch and Packer worked together was a failed mobile phone company, One.Tel Ltd., which lost hundreds of millions of dollars and declared bankruptcy in 2001.
The deal is subject to board approval then shareholder approval, as well as approval from Australia's securities regulator.
News and Related Story Links:
- Wall Street Journal:
Lachlan Murdoch, James Packer Tie Up for Australian Media Firm