Gordon Loses Court Challenge to CBS's Bid for Ten Network -- Update

   By Rob Taylor 
 

CANBERRA, Australia--Australian television entrepreneur Bruce Gordon and Lachlan Murdoch - the son of media mogul Rupert Murdoch - have lost a legal bid to thwart the takeover of insolvent Ten Network Holdings Ltd. (TEN.AU) by U.S. broadcasting giant CBS Corp.

Mr. Gordon and News Corp. (NWS) Co-chairman Mr. Murdoch had challenged the proposed 201 million Australian dollars (US$161 million) buyout of Ten Network in court, arguing their bid to buy the company wasn't properly considered by insolvency specialists KordaMentha in deciding to favor CBS's bid last month.

On Monday, however, the Supreme Court in New South Wales state dismissed the challenge, clearing the way for a meeting of creditors' on Ten Network's future on Tuesday.

"I am not satisfied that the plaintiffs have established that any deficiencies … such as to warrant orders requiring that further information be provided to creditors or that the second creditors' meeting be restrained," judge Ashley Black said in his Monday determination.

Ten Network was placed into voluntary administration in June, with administrators last month deciding to sell the company to CBS. Mr. Gordon and Mr. Murdoch - Executive Chairman of Twenty-First Century Fox - launched a fresh bid for Ten last Friday after Australia's Parliament passed laws easing ownership controls in the media sector.

Australia's traditional media outlets, including The Wall Street Journal publisher News Corp., have been hard hit in recent years by falling advertising revenue as audiences embrace digital platforms.

Parliament last week abolished a 75% audience "reach rule" that prevented free-to-air television networks like Nine Entertainment Co., Seven West Media Ltd. and the Ten Network Holdings Ltd. from snapping up regional affiliates. It also abolished the two-out-of-three rule that prevented large media companies from controlling free-to-air TV stations, newspapers and radio stations in the same market.

Mr. Gordon and Mr. Murdoch had sought a declaration from the court that KordaMentha's report to creditors on the proposed CBS tie-up did not provide adequate information about their joint bid for Ten Network.

They also sought to lower the weighting of CBS's own vote on the merger, with the U.S. behemoth having been the largest creditor to Ten before the network went into administration.

Judge Black said the question of "which of any competing commercial proposals put by interested parties would be most advantageous" to Ten Group creditors was a matter for creditors and shareholders. He ruled that CBS would not be restricted in voting.

-Write to Rob Taylor at [e-mail]

(END) Dow Jones Newswires

September 17, 2017 22:36 ET (02:36 GMT)

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