News Corp. heir Lachlan Murdoch has pulled out of a A$3.3 billion ($3 billion) deal with fellow mogul James Packer to privatize Packer’s Consolidated Media Holdings.
CMH is one of Down Under’s premier media groups; it owns 25% of paybox Foxtel and 25% of PBL Media, which in turn owns the Nine Network — one of Oz’s leading free webs — among other prime Australian media assets.
Early Monday, CMH shares halted trade on the Australian Stock Exchange. Soon thereafter, Murdoch’s private company, Illyria, announced it wanted out of the deal.
In a letter to CMH, Illyria said it was not in a position to proceed “due to material changes in the overall transaction terms.”
Illyria and Packer’s private company, Consolidated Press Holdings (CMH’s major shareholder), made a nonbinding deal in January to each take a 50% stake in the media investment company.
The deal almost failed last month when a San Francisco-based private equity firm, SPO Partners & Co., backed out. Murdoch said in his letter that they had found other backers but still did not wish to proceed.
Speculation is that the new investor, U.S. private equity group Providence Equity Partners, thought Illyria was paying too much for CMH.
The overall downturn in the market also likely dampened enthusiasm for what would have been an historic union of the Packer and Murdoch families, who in a previous generation were sworn rivals.
Still, Murdoch has not declared the deal completely dead, with Illyria reserving the right to come back to CMH with a new proposal in the future.