Murdoch wields axe and cheque book
June 20, 2012 - 10:43AM
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Rupert Murdoch cuts and spends. Photo: AFP
News Ltd is expected to announce a major round of job cuts this morning, joining Fairfax Media in streamlining print and digital operations.
The job cuts, possibly numbering about 1000, come just two days after Fairfax Media revealed plans to lop 1900 jobs, or about one-in-five staff, over the next three years.
News is expected to hold a staff meeting at 10.30am, AEST, to reveal the job losses.
Rupert Murdoch's News, though, has acted ahead of any job cut announcements with a surprise takeover bid for Consolidated Media Holdings, a major stakeholder of Foxtel and Foxtel Sports.
The News bid values ConsMedia at $3.50 a share, or about $1.97 billion, and has the blessing of billionaire James Packer who holds a 50 per cent stake in the company through Consolidated Press Holdings (CPH).
CPH welcomes News's proposal and looks forward to [ConsMedia] and News working together to address the detailed terms and conditions, Mr Packer said in a statement.
CPH considers the offer price to be fair will support the proposal in the absence of a superior cash offer, he said.
News would emerge with 50 per cent control of Foxtel, the country's biggest pay TV operator, and all of FoxTel Sports - provided it can secure approval from market regulator, the Australian Competition and Consumer Commission. Telstra holds the other half of Foxtel.
News's parent, News Corp. has been the centre of a series of investigations in the UK after at least one of its newspapers engaged in widescale telephone hacking. The company, constrolled by the US-based billionaire Mr Murdoch, has also been accused of wielding excessive political clout in the country - an issue which may get an airing in Australia given the current consolidation apparently underway.
At Fairfax, meanwhile, investors are awaiting the next move by Gina Rinehart, the world's richest woman and also Fairfax's biggest single shareholder. Mrs Rinehart is demanding three seats on the company's board and has so far failed to respond to a letter from Fairfax journalists calling on her to sign up to their charter of independence from management influence on their work.
Packer's plan
Mr Packer, meanwhile, would all but exit Australia's media market, leaving him with just a 6.9 per cent stake in Ten Network.
The ConsMedia deal, though, would bolster Mr Packer's warchest by about $1 billion as he considers expanding his 10 per cent stake in Echo Entertainment.
On a much smaller scale, News is also understood to have purchased the niche business commentary website Business Spectator and its sister Eureka Report publication.
The takeover action in the media sector has helped lift Fairfax shares this morning. They were up as much as 4.2 per cent or 2.5 per cent in early trading, to 62 cents. The stock has had a volatile week, soaring on Monday and diving yesterday.
News Ltd and ConsMedia shares are in a trading halt until 11am AEST.
