Packer returns with raid on Ten Four years ago he sold out of Nine Network, now...

JAMES PACKER is back.

By InvestSMART · 20 Oct 2010

By InvestSMART ·
20 Oct 2010

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JAMES PACKER is back.

Four years after exiting the media industry with a top-of-the-market sale of media assets including the Nine Network, Packer family interests are being fingered for a $250 million raid on the Ten Network last night.

The latest cash splash comes less than a week after Packer interests spent $200 million increasing the family stake in his casino business Crown Ltd.

The half-billion-dollar splurge marks an aggressive return for Packer, whose wealth was decimated in the global financial crisis. It was reported he took the loss of wealth particularly hard.

Late yesterday the investment bank UBS began scouring the market to buy 15 per cent of Ten Network. By last night the bank was believed to moving towards 20 per cent of the company with a stake potentially valued at $313 million and large enough to gain significant representation at Ten's board table.

UBS offered $1.50 a share, a modest premium to yesterday's closing price of $1.41. Ten shares are trading well below recent highs of $1.90. Shortly after 6pm, 163 million shares, or 16 per cent, of Ten stock was crossed through the market.

Ten's share register has been open since the Canadian broadcaster CanWest was forced to dump its majority 50 per cent stake after hitting debt troubles in the financial crisis.

The executive chairman of regional broadcaster WIN Television, Andrew Gordon, who controls 13 per cent of the Ten register, told the Herald he was not selling into the raid.

But it is understood several shareholders, including Perpetual, sold stock. Perpetual is thought to have sold down its 13 per cent stake by about 3 per cent. Other major shareholders in the Ten include the Commonwealth Bank.

A spokesman for Ten Network declined to comment.

Mr Packer sold the bulk of his media interests in PBL Media to the private equity firm CVC Asia Pacific for $4.6 billion at the height of the private equity binge in 2006 and then sold a further stake for nearly $500 million a year later. He declined to take part in a recapitalisation of the business when it began to struggle under its debt pile, virtually diluting his stake to nil.

Suggestions in the market last night were that Packer family interests would be satisfied with a 20 per cent stake and representation at the board table.

The raid will increase pressure on Ten management and in particular its boss, Grant Blackley.

David Gyngell, a close friend of Packer and the Nine Network chief executive, recently joined the Crown board and bought a parcel of shares. Sources last night were speculating those close ties to Packer could prompt Gyngell to jump ship and join Ten.

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Frequently Asked Questions about this Article…

Who is James Packer and why is he back in media investing?

James Packer is a prominent Australian investor who previously exited the media industry after selling his PBL Media assets (including the Nine Network). The article reports Packer family interests are linked to a reported $250 million raid on the Ten Network, marking a high‑profile return to media investing after rebuilding his wealth following losses in the global financial crisis.

What exactly happened in the reported raid on the Ten Network?

The report says investment bank UBS began buying Ten shares aiming for about 15% of the company and was later thought to be moving toward 20%. UBS offered $1.50 a share (a modest premium to the prior close of $1.41). By around 6pm, 163 million shares — roughly 16% of Ten — were crossed through the market, a stake potentially valued at about $313 million.

How could a 15–20% stake affect Ten Network’s board and management?

A 15–20% stake is large enough to win significant representation at the board table. The article says market suggestions were that Packer family interests would be satisfied with a roughly 20% stake and board representation, and that the raid would increase pressure on Ten’s management and chief executive Grant Blackley.

What role did UBS play in the share purchases for Ten Network?

According to the article, UBS was the investment bank tasked with scouring the market to buy shares in Ten. UBS reportedly offered $1.50 a share and executed large crosses — including the 163 million‑share cross that equated to about 16% of Ten's stock.

Which major Ten Network shareholders sold or held their shares during the raid?

The article notes WIN Television executive chairman Andrew Gordon, who controls about 13% of Ten, said he was not selling. It reports some shareholders, including Perpetual, sold stock (Perpetual is thought to have trimmed about 3% of its 13% holding). Other major shareholders mentioned include the Commonwealth Bank.

What was Packer’s prior involvement with PBL Media and the Nine Network?

The article says Mr Packer sold the bulk of his media interests in PBL Media to private equity firm CVC Asia Pacific for $4.6 billion in 2006, then sold a further stake for nearly $500 million a year later. He declined to take part in a later recapitalisation as the business struggled with debt, which effectively diluted his stake to nearly nil.

Is this reported Ten Network move connected to Packer’s recent investment in Crown Ltd?

The article notes the reported cash splash on Ten came less than a week after Packer interests spent $200 million increasing the family stake in casino operator Crown Ltd. The article presents both moves as part of an aggressive return to investing, but does not claim a direct strategic link beyond timing and the same family interests being involved.

What should everyday investors watch for when a high‑profile investor targets a company like Ten Network?

Based on the article, investors should watch for: share purchases and the premium being offered (UBS offered $1.50 vs a $1.41 close), announcements of board representation or changes, statements from major shareholders (some may sell, others may hold), and potential pressure on management. These developments can affect share price volatility and corporate strategy in the short term.