Next stage approval for Foxtel/AUSTAR merger

December 29th, 2011

FAKE NEWS for the Zionist agenda

news The Foreign Investment Review Board (FIRB), led by Treasurer Wayne Swan, has announced the approval of the multi-billion dollar merger between pay TV companies Foxtel and AUSTAR. The merger will bring together two of Australia’s major subscription TV service providers.

On July 11, Austar had announced the signing of definitive transaction agreements with its parent shareholders Liberty Global Inc. (LGI) and FOXTEL Management Pty Limited (FOXTEL), which would enable Foxtel to acquire Austar via a series of transactions including a scheme of arrangement (Scheme). Foxtel is a joint venture between Telstra and Consolidated Media Holdings.

Foxtel’s bid to acquire Austar was made in May, a move that will create a new Australian media titan with more than 2,500 full-time equivalent employees and revenues predicted in the region of $2.8 billion. The proposed acquisition price of $1.52 per share would place Austar’s value at beyond $2.5 billion. The acquisition will be funded by a combination of Foxtel bank debt and capital contributions from shareholders.

This scheme was subject to several conditions including the FIRB approval that has now been received, and scrutiny by the Australian Competition and Consumer Commission (ACCC). The ACCC is an independent statutory authority responsible for administering the Competition and Consumer Act 2010.

Other conditions included the completion of due diligence and negotiation and execution of transaction agreements and also financing support. Additionally, the US Internal Revenue Service must deliver a ruling that confirms Liberty Global’s proposed treatment of the transaction.

In a statement issued shortly before Christmas, Swan approved the proposal under the government’s foreign investment policy and the Foreign Acquisitions and Takeovers Act 1975. He noted however, that his decision does not prejudice the ACCC’s consideration of the proposal. The Scheme also remains subject to a condition precedent in relation to competition law requirements and many other conditions that include Austar shareholder and court approval and various customary conditions for this type of transaction.

The ACCC had expressed concern about the merger and had in July, pushed back the timeline for the review to August 11 to enable more businesses to share their opinions on the release of a Statement of Issues document pointing out several concerns about the deal’s impact. The concerns include the current level of competition on the Gold Coast, the only Australian region where both Austar and Foxtel provide competing services. The ACCC had also noted that Internet Protocol TV (IPTV), that would become more freely available as the National Broadband Network (NBN) rolls out, would also ensure some level of competition.

Optus chief executive Paul O’Sullivan had warned that the next battlefield for Australia’s telco sector in an NBN environment would be ‘open access’ to applications and content. The SingTel subsidiary, meanwhile, had also expressed concern that the merger would strengthen Telstra which has been greatly combining Foxtel’s content with its telecommunications services.

Swan emphasised the government’s encouragement of foreign investment in Australia and its focus on ensuring that these investments are consistent with Australia’s national interest.