CanWest Global Communications CEO Izzy Asper confirmed to Daily Variety that the Winnipeg-based Canadian broadcast group has stitched together a $ A230 million ($ 161 million) deal to buy the three O&O stations of Australia’s Network Ten from the Westpac Bank.
The deal–still to be finalized–is clouded by tough foreign investment regs, limiting overseas ownership to 15%.
After the annoucement yesterday, the Australian Broadcasting Authority immediately called on Westpac for more details.
So far the Aussie members of the consortium (named Oltec Ltd.) have not been identified, but regional broadcaster and network affiliate Television North Queensland has expressed interest, per its chairman George Chapman.
Asper claimed that the reason for delay in naming other partners was the need to determine that a deal could be concluded. He said, “The consortium will be a small group,” with each member having roughly the same amount of equity.
“No one will have control,” he emphasized, but the deal is structured to allow an increase in CanWest’s interest should the foreign ownership rules be relaxed. Asper added that Ten’s current managing director, Gary Rice, has been asked to stay on.
CanWest is providing $ 4.8 million in equity (15%) and $ 32 million in subordinated convertible debentures.
Aussie banking sources say Westpac will keep $ 32 million in equity, but is lending some $ 105 million at commercial rates.
Last week, the network announced the results of last year’s trading as $ 19.6 million in earnings (before tax and interest).
Westpac and CanWest already are associated in latter’s 20% ownership of New Zealand’s TV-3.