Murdoch/Packer CMH Deal Loses SPO

SYDNEY, March 6: SPO
Partners, the U.S. backers of Lachlan Murdoch and James Packer’s $2.8 billion-bid
for Australia’s Consolidated Media Holdings (CMH), has pulled out of the deal.

In January, Murdoch and
Packer teamed for an A$3.3 billion offer to buy out CMH, which was formed in
November 2007 following the split of PBL into two publicly listed companies:
Crown, focused on gaming, and CMH, focused on various media assets. CMH’s
assets include 25 percent of FOXTEL; 50 percent of The Premier Media Group,
producer of the sports channels Fox Sports 1, 2 and 3; 26.9 percent of the
online employment business SEEK; and
25 percent of PBL Media, comprising
the Nine Network, ACP Magazines, NBN, Ticketek, Acer Arena, an interest in Sky
News, a 50-percent stake in ninemsn, and other assets.

The deal would have seen
Illyria, Murdoch’s private investment company, taking a 50-percent stake in
CMH. CMH’s majority shareholder, Consolidated Press Holdings Limited
(Conspress), of which Packer is executive deputy chairman, would hold the other
50 percent.

SPO Partners was a
significant U.S. backer of the deal. CMH indicates that the withdrawal is
primarily due to “changes in investment conditions specific to SPO.”

Illyria is in discussions to
replace SPO’s equity contribution. Murdoch noted in a statement: "Illyria
has received strong preliminary indications of willingness to replace SPO's
funding commitment.

Illyria's due diligence
has been progressing well. Illyria remains enthusiastic about the indicative
proposal."

—By Mansha Daswani