Network Ten has been the unloved step-sister of Australian TV in recent years but a string of would-be fairy godmothers are lining up to give the struggling broadcaster a Cinderella-like makeover.
The latest name linked to a possible takeover is US media giant Time Warner, which has reportedly approached Ten with a $680 million bid.
According to the Australian Financial Review, Time Warner approached Ten’s investment banking adviser Citi in October with a 25-cents-per-share offer.
Among the other possible bidders are US cable giant Discovery and pay-TV business Foxtel, which are reportedly considering a joint bid, and Fairfax Media, which is said to have held merger talks with the network.
A number of private equity firms are also believed to be looking at a possible takeover.
IG market strategist Evan Lucas said Ten, which has struggled to lure both viewers and advertisers for several years could be a good strategic buy for a media giant like Time Warner or Discovery, which could provide quality content.
“Time Warner has HBO under its belt and that is obviously a massive revenue driver on cable,” he said.
“That’s the interesting thing about it, whether they would want to take those programs, which do really well here in Australia, and put them on free to air.”
Alternatively, he said, a private equity group would be able to substantially cut costs at the network and increase its ability to bid for top-quality content.
Mr Lucas said Time Warner may also consider using Ten as a way to set up an online streaming service for its content in Australia.
HBO is entering the online streaming market in the US, putting it in direct competition with market-leading Netflix.
Australian broadcasters, meanwhile, are venturing into the streaming business as they prepare for the expected local arrival of Netflix in 2015.
“All those guys are looking at streaming, they believe streaming is the future,” Mr Lucas said.
“All of them are looking at a way to beat Netflix and be in that market and be ready for it.”
The interest from buyers has been a rare bit of good news for Ten shareholders, with the company’s share price climbing 30 per cent in the past week, though it remains well down on where it was a couple of years ago.
Mr Lucas said a takeover would also lock-in losses for the network’s high profile shareholders, which include James Packer, Lachlan Murdoch, Gina Rinehart and WIN Television owner Bruce Gordon, all of whom bought in at significantly higher prices.
“No matter what price they (buyers) offer, they will crystallise a loss,” he said.
Ten shares continued to rise on Monday, adding half a cent to 27.5 cents.
