Oz laws fuel a flux

PBL's media sale likely first of many

SYDNEY — Hours after the government approved Oz’s new media laws, Publishing & Broadcasting Ltd. spun off its major media assets into a new company and sold a half interest to private equity group CVC Asia Pacific for A$4.5 billion ($3.4 billion).

Deal — which ends days of speculation that resulted in the suspension of trading in PBL shares on Tuesday — allows PBL to spin off its flagship Nine Network, its share in Internet joint venture Ninemsn, its ACP magazine division and its share in Web site Carsales.com.au to create PBL Media, which will be the country’s largest diversified media org.

PBL will retain its 25% holding in feevee operator Foxtel, which it owns along with telco Telstra and News Corp.

The massive cash injection will be used to further the group’s gaming interests; PBL owns Melbourne’s Crown Casino and is pursuing gaming assets in Macau and Singapore.

“For PBL, it releases cash at a time when there is a land grab under way for gaming and entertainment assets around the world,” PBL topper James Packer said of the deal.

Australia may well see a media acquisition frenzy. The deal came on the same day that Oz’s new media laws, which allow foreign companies to purchase local media assets for the first time in 20 years, passed through the Lower House of Parliament and into law. The laws are likely to come into effect sometime after February 2007.

CVC Asia Pacific has only an “economic” interest in PBL Media. Because the new media law allowing foreign ownership of Oz companies will not become effective until sometime next year, the deal is structure to give CVC convertible notes that can be converted to equity once the new law goes into effect.

Move allows Packer to retain control of the media assets that helped his father, Kerry, build the PBL empire, but also pursue his own interests in gaming and put his stamp on the company following Kerry’s death last year.

In related news, there was further jockeying for position in the media sector: Seven Network launched a $150 million share raid on West Australian Newspapers, as Seven positions itself for a takeover ahead of the new media laws.

The flurry of media activity has caught the government by surprise. The initial response to its media laws proposal earlier this year was lukewarm at best. Communications Minister Helen Coonan has asked watchdog the Australian Communications & Media Authority to check both of the recent deals to ensure they comply with the current laws.

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