perpetual backs change at ten network

Perpetual backs change at Ten Network

UPDATE: James Chessell
From: The Australian
October 20, 2010 5:40PM

TEN'S largest institutional shareholder, Perpetual, has thrown its support behind possible changes to the network's strategy.

In a blow to Ten management ahead of its annual results announcement tomorrow, Perpetual head of equities John Sevior told The Australian: Clearly the existing formula is not working.

Mr Sevior, who has not spoken to James Packer, would not comment on Ten management directly but said that the company is under-earning relative to its peers and its own history.

The Perpetual executive added: I think changes need to be made and if someone has got a strong view and can add some insight and expertise, then I think that would be welcomed.

Perpetual's holding dropped from 12 per cent to 9 per cent this week, after it sold stock into Mr Packer's share raid late yesterday.

Mr Packer was today hoping to emerge with 19.9 per cent of Ten Network after snapping up more shares in the free-to-air television broadcaster. It is believed that Mr Packer has been buying more Ten shares after yesterdays late raid netted him a 16 per cent stake in Ten.

The billionaire is expected to announce tomorrow that he has upped his stake to about 18 per cent. The maximum amount a single investor can own before launching a takeover bid is 19.9 per cent.

The market is betting Mr Packer will not make a bid - Ten shares were trading only slightly above his $1.50 entry price.

The latest market action comes a day before Ten releases its full-year results. Ten executive chairman Nick Falloon, a former Packer executive, and chief executive Grant Blackley will face questions about their new shareholder.

It is understood Mr Packer will attempt to return Ten to a lower-cost network in a move that could have serious implications for its plans to broaden its news and current affairs coverage, as well as digital sports channel ONE.

Tens outdoor advertising business, Eyecorp, is likely to face scrutiny. Mr Packer will also push for board representation.

If Mr Packer can garner the support of other shareholders - including WIN Television owner Bruce Gordon (who owns a 12 per cent stake) and Perpetual (which owns a 9 per cent stake) - he is likely to be able to effect change.

Given Mr Gordon is said to be unhappy with some aspects of Tens strategy and Perpetual sold down some of its stake to Mr Packer, this is a real possibility.

http://www.theaustralian.com.au/business/media/mogul-will-sit-on-the-takeover-threshold/story-e6frg996-1225941219437