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Friday, May 4, 2012

Packer eyes Foxtel stake sale; UBS to sell Packer's stake in Foxtel holding company

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Packer eyes Foxtel stake sale...

Billionaire James Packer has hired UBS to sell his 25 per cent stake in pay TV operator Foxtel, worth about $1 billion, raising speculation he may bid for casino group Echo Entertainment and its prize asset, Sydney's Star casino.

Mr Packer, who has stakes in casinos in Australia, London, Macau and Las Vegas, has mandated UBS to sell his 50.1 per cent holding in Consolidated Media Holdings, which holds the Foxtel stake as well as content-provider Fox Sports, a source with direct knowledge of the situation said today.

The move has renewed talk that Mr Packer may look to add Echo, which has a market capitalisation of $3 billion, to Crown, the Packer-run owner of Melbourne's Crown casino and Perth's Burswood casino, to create a $10 billion gaming giant.

Selling the Foxtel stake would allow Mr Packer to hold 40-45 per cent of a merged Crown/Echo entity and would anchor his Asian and global gaming ambitions, maximising growth in the high-roller business from Asia, the Herald-Sun newspaper said today.

Crown has already applied to Australia's gaming authority to raise its stake in Echo above 10 per cent after hitting that limit in February.

"These are monopoly assets, there is only one casino (operator) in each state. They are much better assets (than Foxtel) from that perspective, and the returns are arguably better," said Karara Capital portfolio manager Akshay Chopra.

"If he were to take over Echo it would be a big price," he added, saying Mr Packer could choose to expand further in Asia instead.

Echo was voted Australia's No. 1 contender to be taken over in 2012 by JPMorgan, which said in January that Crown would need to act quickly before recent spending on Star flowed through to its bottom line.

Both CMH and a UBS spokeswoman in Sydney declined to comment.

UBS joint global head of investment banking, Matthew Grounds, sold Mr Packer's Nine Network TV asset in 2006 for $4.5 billion.

CMH shares were flat at $3.30 a share today. Packer wants $3.60 a share, the Herald Sun said.
Rupert Murdoch's News Corp, which owns 25 per cent of Foxtel, would likely have first rights to buy the Packer interest, the paper said, while Seven West Media, controlled by billionaire Kerry Stokes, may also be interested.

Seven could not be reached for comment.

The Herald Sun, owned by Rupert Murdoch's News Corp, said if granted foreign ownership approval "News Corp could move to control literally overnight".

"He has to sell to Murdoch. That's the only way to bring certainty and pretty quick finality," the paper said.

Telecommunications company Telstra, which holds the remaining 50 per cent of Foxtel, has said it wants to up its 50 pe rcent stake but may face competition hurdles.

Shares in Telstra rose 0.3 per cent, Crown fell 0.9 per cent, Echo added 2.2 per cent, News Corp firmed 0.1 per cent and Seven West lost 0.7 per cent. (Reuters)


UBS to sell Packer's stake in Foxtel holding company...

Australian billionaire James Packer has appointed investment bank UBS (UBSN.VX) to sell his 25 percent stake in pay TV operator Foxtel, a source with direct knowledge of the deal said on Thursday.

UBS will negotiate the sale of his 50.1 percent stake in Consolidated Media Holdings (CMJ.AX), which holds the Foxtel pay TV holding, the source confirmed.

The sale, worth about $1 billion, would fund a takeover of casino group Echo Entertainment, the Herald Sun newspaper said on Thursday.

Consolidated Media would not comment on the matter.


Australia's Packer to sell Foxtel stake, buy Echo: report...

Australian billionaire James Packer plans to sell his 25 percent stake in pay TV operator Foxtel, worth about $1 billion, to fund a takeover of casino group Echo Entertainment to form a $10 billion gaming giant, the Herald Sun newspaper said on Thursday.

Packer wants to add Echo (EGP.AX), which owns the Star casino in Sydney as well as the Jupiters and Treasury casinos in Queensland, to his Crown (CWN.AX) casino group, the newspaper said, without naming any sources.

Crown, which owns Crown casino in Melbourne and the Burswood casino in Perth, doubled its stake in smaller rival Echo in February to 10 percent.

Echo has a market capitalization of A$3.1 billion.

Packer has appointed UBS joint global head of investment banking, Matthew Grounds, to negotiate the sale of his 50.1 percent stake in Consolidated Media Holdings (CMJ.AX), which holds the Foxtel stake, and Packer wants A$3.60 a share, the paper said. The stock closed at A$3.30 Wednesday.

Selling the Foxtel stake would allow Packer to hold 40-45 percent of the merged entity and would anchor his Asian and global gaming ambitions, maximizing growth in the high-roller business from Asia, the newspaper said.

Rupert Murdoch's News Corp (NWS.AX), which owns 25 percent of Foxtel, would get first rights to buy the Packer interest. Seven West Media (SWM.AX) would also be interested, the paper said.

Telstra, which holds 50 per cent of Foxtel, may face regulatory hurdles.

Echo was voted Australia's No. 1 contender to be taken over in 2012 by JP Morgan's hedge fund sales desk. (Reuters)


Australia's Packer to sell Foxtel stake: reports...

SYDNEY — Australian tycoon James Packer is set to sell his 25 percent stake in pay-TV operator Foxtel for Aus$1 billion (US$1.03 billion) with News Corp. the likely buyer, reports said Thursday.

If the sale goes ahead, it will be the first time in a century that the Packer family will have no media interests in Australia, apart from a small stake in the Ten Network.

News Limited newspapers said Packer wants the cash to pursue a full merger of his Crown Casino in Melbourne and Sydney's Star Casino to create an Aus$10 billion gaming giant.

A sale of the Foxtel stake will add to the Aus$4.5 billion he received in 2006 from selling the family's long-held controlling stake in the Nine Network, an empire founded by his grandfather Frank Packer.

Communications giant Telstra Corp. owns 50 percent of Foxtel and Rupert Murdoch's News Corp. the other quarter.

News Limited newspapers said News Corp., their parent company, would likely get first rights to buy the Packer interests, just days after a British parliamentary committee said Murdoch was not fit to run a major operation.

Australian billionaire Kerry Stokes's Seven Network could also be interested, the reports said.
Packer is the son of the late mogul Kerry Packer but since his death has moved away from the family's traditional media business and focused on creating a worldwide gaming empire.

As well as Australia, he has casino interests in Macau, the world's biggest gaming hub. (AFP)

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