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Ten Network Sells EYE Corp

Posted: July 20th, 2012 | Author: | Filed under: Media, Television, World of the News | Tags: , , , , , , | Comments Off on Ten Network Sells EYE Corp

World of the News - Ten Sells EYEAustralia’s least favourite television network – Ten Network – has announced the sale of its EYE Corp outdoor advertising business to Champ Private Equity for up to $AU145 million. The sale will proceed via Champ’s outdoor media interest Outdoor Media Operations – OMO – owner of oOh!media.

Ten will receive $120 million cash on completion of the sale, with $AU25 million deferred for three years, the full payment of which will depend on various factors. One of those factors is the price that OMO can get for EYE’s United Kingdom and US businesses, which intends to sell off immediately. Ten may also choose, or be required, to repurchase those businesses if they are not sold within an agreed timeframe.

Ten is also keeping oround $AU16 million worth of “onerous contracts”, but subcontracting the operation of them to OMO. The  Ten statement notes certain of EYE’s Australian contracts will be retained by Ten, but the operation of the relevant assets will be subcontracted to OMO. The net present value of these contracts is estimated at around $AU16 million ::::

Australia - Ten Network Sells EYE to OMO

“OMO intends to sell the US and UK operations of EYE to third parties. In the event that either or both of these operations are not sold within an agreed timeframe, Ten may choose, or be required, to reacquire them from OMO for nominal consideration. Ten will have an economic exposure to the outcome of the sale of the US and UK operations and, until sold, the funding of those operations.” Ten CEO James Warburton, said. “We are pleased with the outcome of the strategic review of EYE that was announced on March 19. Successful completion of the transaction with OMO will be good news for Ten. It will make our balance sheet stronger by further reducing debt and will give us additional opportunity to invest in the creative renewal of Ten’s television content.”

However, despite the conditions on the sale, Mr Warburton says it is a good deal for the company. “Successful completion of the transaction with OMO will be good news Ten,” he said in a statement. “It will make our balance sheet stronger by further reducing debt and will give us additional opportunity to invest in the creative renewal of Ten’s television content.”

Ten says it will use the proceeds of the sale to further pay down debt, after recently also raising $200 million from shareholders.

The deal is subject to regulatory approval.


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