Kerry Stokes is behind a massive buying spree in Consolidated Media Holdings Ltd shares. The declaration made to the Australian stock exchange sparked speculation Stokes may attempt to ultimately take control of ConsMedia from Packer, who is a board director.
According to reports in WA Business News the Stokes led Seven Network has raided ConsMedia to build up an 18.32 per cent stake through its subsidiary, Network Investment.
It reportedly spent $234.24 million buying 92.91 million ConsMedia shares in five tranches to lift its interest from 4.8 per cent. It now has 126.31 million shares in total.
James Packers main investment vehicle, Consolidated Press Holdings, in reply bought 9.68 million ConsMedia shares to increase its interest to 39.3 per cent.
Analysts believe Stokes may be planning to use ‘creep' provisions under corporations law to incrementally increase the stake, as he has done with West Australian Newspaper Holdings Ltd (WAN) which he now chairs.
Analysts view the recent buying spree by the Stokes/Seven Network on ConsMedia as bringing into play significant rivalry with both Stokes and Packer wanting to call the shots at ConsMedia, whose online and pay TV assets have strong growth prospects in a media market that once relied on print and free-to-air TV.
ConsMedia owns 25 per cent and 50 per cent, respectively, of pay TV firms Foxtel and Fox Sports operator Premier Media Group, plus a 26.7 per cent stake in Australia's largest online employment firm Seek Ltd.
PBL was demerged into casino operator Crown Ltd and ConsMedia in December 2007 after Packer sold half of its media interests for $4.5 billion in 2006. Despite his strong focus on the gaming and wagering business, analysts say Packer appeared intent on defending his majority stake in ConsMedia.
David Taylor, market analyst at CMC Markets was reported in WA Business News as saying talk of a takeover by Seven was "way too premature."
"Packer is bullish on new media....he is not interested in giving up ConsMedia any time soon. The assets are too valuable," Mr Taylor said.
"It looks like both gentlemen see long-term value in the assets of ConsMedia so at this stage, Stokes' play looks strategic and it looks as if he is just trying to wedge his foot in the door at the moment. It will play out over a long period of time."
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