$2.7 Billion Offer To Buy Foxtel Rejected

$2.7 Billion Offer To Buy Foxtel Rejected

An American media investor had a $US2 billion ($A2.7 billion) offer to buy a major stake in Foxtel rejected, it has been revealed.

The Herald, is reporting that US TV executive Leo Hindery – who runs the InterMedia Partners fund – approached News Corp with the offer from a special purpose acquisition company (SPAC) earlier this year.

A SPAC – also known as a ‘blank cheque company’ – is a publicly listed company that acquires capital with the sole purpose of acquiring an unlisted business.

According to the reports, News Corp – which owns a 65 per cent stake in the pay TV provider – declined the offer.

The proposed bid would have left News Corp with a 30 per cent stake in Foxtel, while Telstra, which currently owns a minority stake, would have been bought out altogether.

The sale would have provided relief for Foxtel’s debt pile, which currently sits at around $1.3 billion.

Foxtel has been diversifying its offering in recent years, in response to the popularity of Netflix.

In 2018 it launched Kayo as a standalone sports streaming service. Despite a pronounced dip in subscribers earlier this year as a result of the COVID-19 pandemic, Kayo has proven a success for Foxtel, currently sitting at 644,000 paying subscribers.

In another SVOD move, Foxtel also launched Binge earlier this year as a new streaming service that can compete with the pricepoint of competitors such as Netflix and Stan.

Binge has also enjoyed some early success, recently announcing it had surpassed the 300,000 subscriber mark.

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