Foxtel to acquire Austar for $2.5 billion

Foxtel will acquire Austar by a series of transactions including a scheme of arrangemen, for the purchase of approximately $2.5 billion, it has been announced.

The merger brings together two of Australia’s largest subscription television providers and create a business with over 2500 employees with an anticipated revenue of more than $2.8 billion and an investment of $500 million per annum in original Australian content.

Shareholders will receive$1.52 in cash per share.

The cash payment of $1.52 per share represents:

  • a 54% premium to the closing price of A$0.985 on 17 February 2011, being the last trading day prior to AUSTAR’s share price being affected by media speculation about a proposed transaction (Reference Date);
  • a 56% premium to the 1 month volume weighted average share price to the Reference Date; and
  • approximately 10x Operating Cash Flows for the last 12 months.

Mr Mike Fries, Chairman of AUSTAR and Chief Executive Officer of LGI said: “AUSTAR is a world class company and LGI is proud to have been part of its development and growth over the last 17 years. John Porter and his team have built one of the best pay TV platforms in the world and this deal is a natural next step for AUSTAR and its subscribers. We look forward to completing the transaction and believe it represents compelling value for all shareholders.”

In a statement, CEO of Foxtel, Kim Williams said, “A merged Foxtel and Austar would make compelling strategic sense and it would continue to invest and innovate in a superb digital service for consumers across Australia, including investing heavily in marvellous new original Australian content.”


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