James Packer’s Consolidated Media Holdings (CMH) says its one-quarter stake of pay TV provider Foxtel is not for sale.
However, the company said in a statement on Friday there had been some discussions which may result in a change of control.
To that end, ConsMedia has appointed investment bank UBS to advise the company should any proposal be made.
A change of control would occur if James Packer offloaded his 50.05 per cent holding in ConsMedia.
ConsMedia’s holding of various pay-TV interests would not be affected by any change of control.
“CMH has had very preliminary discussions concerning a possible control proposal,” ConsMedia said.
“No control proposal or other form of offer has been made to CMH and CMH can give no assurance that a control proposal will be made.
“CMH is not considering a sale of its Foxtel interest.”
Mr Packer has made no public indication he was considering selling his stake in ConsMedia.
However the son of the late media mogul Kerry Packer has been increasingly focused on his gambling interests both in Australia and overseas in recent times.
Mr Packer’s stake in ConsMedia was worth about $928 million, based on the stock’s current market capitalisation.
The proceeds from any sale would give Mr Packer’s Crown casino business the funds to mount a takeover bid for Echo Entertainment Group, which has casinos in Sydney, the Gold Coast and Townsville.
Crown upped its stake in Echo from 4.9 per cent to 10 per cent in February 2012.
ConsMedia owns 25 per cent of Foxtel and has a 50 per cent stake in Fox Sports.
Foxtel is half owned by Telstra Corporation, with Rupert Murdoch’s News Corporation and ConsMedia each holding a 25 per cent stake.
Meanwhile, Fox Sports is a fifty-fifty partnership between ConsMedia and News Corp.
Potential buyers of Mr Packer’s stake could include Kerry Stokes’s Seven Group Holdings, which was ConsMedia’s second-largest shareholder.
Alternatively Telstra could bid, although the Australian Competition and Consumer Commission would undoubtedly raise concerns with the nation’s dominant telco increasing its holding in the country’s largest pay-TV provider.
News Corporation was another potentially interest party, while another option could be a placement to institutional shareholders.
One market analyst said Mr Packer’s exit strategy was “quite flawed”, given the limited number of buyers prepared to pay a premium for control of the pay-TV investment vehicle.
ConsMedia shares closed six cents lower at $3.24.
