Ten shares drop amid reports US giant Discovery has walked away from purchase

Shares in Network Ten have dropped this morning despite the company looking to downplay a report that the Discovery Network has walked away from its bid for the troubled TV network.

Today’s Australian Financial Review reports the American cable giant walked away from its offer to buy the main assets of Ten with Foxtel after the Ten board rejected an alternative offer that it take only a 14.99 per cent stake and a board seat.

Despite Ten (ASX:TEN) issuing a statement to the Australian Securities Exchange this morning urging “caution in dealing in its shares on the basis of media speculation about potential transactions involving the company” the share price crashed from 22c to 21c in early trading, and is sat at 21.5c as of 11am giving the company a market capitalisation of $565.55m.

Early trading on Ten’s shares this morning dropped 1c to 21c. Source: Google Finance

It is just weeks since Discovery Communications and Foxtel revised their bids for the embattled broadcaster in the face of opposition from major shareholder Bruce Gordon, who had himself proposed his own offer to which would have seen him put up his own debt proposal giving him more control over the broadcaster.

In the statement to the market Ten restated that: “Independent Board Committee of Ten is considering a number of transaction proposals which vary in type and value and remain confidential, non-binding and conditional in nature. Discussions are continuing with various parties and may or may not result in a transaction which is acceptable to Ten.

“Ten will update the ASX again when required to do so under its continuous disclosure obligations.”

Today’s edition of The Australian reports that management at Ten have been frustrated with some of the media leaks on the sale.

Ten chairman Hamish McLennan is reported to have asked the directors to sign affidavits late last year following a series of leaks from Ten that appeared in The Australian ­Financial Review. Despite this the leaks have continued.