Ten network said to draw interest from Time Warner, Discovery

MELBOURNE – Ten Network Holdings Ltd., Australia’s No. 3 free-to-air commercial broadcaster, has drawn interest from potential buyers including Time Warner Inc. and Discovery Communications Inc., people with knowledge of the matter said.

Ten received a proposal from Time Warner that values the company at A$0.25 per share, or about A$678 million ($589 million), one of the people said. Providence Equity Partners LLC is also studying a bid for Ten, while Discovery is weighing a joint offer with local pay-TV operator Foxtel, the people said, asking not to be identified as the details are private.

The network, which broadcasts the U.S. television show “24” in Australia, has seen its share of viewers shrink in part because it lacks the rights its rivals have to broadcast the nation’s most popular sports. While Chief Executive Officer Hamish McLennan is taking steps to cut costs and jobs, the Sydney-based company is forecast to post losses through 2017, data compiled by Bloomberg show.

Ten has also received interest from U.S. buyout firm Hellman & Friedman LLC, according to one of the people. Suitors have put forward a number of possible deal structures including a full takeover, an equity injection and a debt restructuring, and it’s unclear whether any transaction will be completed, the person said.

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The broadcaster said last week it had appointed Citigroup Inc. to advise on strategic options and that there was no guarantee of a deal being reached. The broadcaster has been working with the New York-based bank on various alternatives, including a sale, since at least July, people with knowledge of the matter said at the time.

Billionaire shareholders

Spokesmen for Ten, Citigroup, Providence and Foxtel declined to comment. An e-mail to Keith Cocozza, a Time Warner spokesman in New York, and calls to Discovery Communications’ media line and Hellman & Friedman’s New York office weren’t immediately answered outside normal business hours.

Gina Rinehart, Asia’s richest woman, owns a 9.5 percent stake in Ten, according to data compiled by Bloomberg. Other shareholders include Lachlan Murdoch, the son of News Corp. chairman Rupert Murdoch, as well as billionaire casino operator James Packer and Australian media executive Bruce Gordon, the data show.

New York-based Time Warner, which owns cable networks HBO and CNN as well as Warner Bros. studio, earlier this year rejected a $75 billion bid from 21st Century Fox Inc.

Discovery, the Silver Spring, Md.-based owner of the TLC and Animal Planet cable channels, has a market value of $22.4 billion. Foxtel is half-owned by Telstra Corp., Australia’s largest phone company, and News Corp.

Providence, the Rhode Island-based buyout firm focused on media and communications investments, manages funds with $40 billion of assets, according to its website. It owns stakes in Spanish-language broadcaster Univision Communications Inc. and Indian mobile operator Idea Cellular Ltd., the website shows.

The Australian Financial Review reported the interest earlier today.

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