News Corp in $2bn bid for Australian pay-TV firm

The move would boost top shareholder and billionaire James Packer’s war chest as he abandons media in favour of casinos.

Mr Packer, who has built stakes in casinos in Australia, London, Macau and Las Vegas, indicated he would accept the offer in the absence of a higher bid for the pay-TV stakeholder, in which he holds 50.1 per cent.

For News Corp, a successful bid would double its stake in Australia’s dominant pay TV business Foxtel to 50 per cent, and give it 100 per cent of content provider Fox Sports.

Mr Packer recently took a 10 per cent stake in Sydney casino-owner Echo Entertainment, through Crown, amid speculation he wants to use Echo’s licence to build a new casino complex in Sydney to attract more Asian high-rollers.

“It frees up more cash and gives him a bit more flexibility,” said Paul Xiradis, managing director of Ausbil Dexia, which owns stakes in News Corp and Echo.

“He’s shown his hand in Echo ... but his intentions are not well and truly understood,” he said.

A sale would see Mr Packer all but exit what was once a media empire, built up over decades by his father Kerry Packer and grandfather Sir Frank Packer, apart from a 10 per cent stake in television company Ten Network.

“My family has a long history in media but I am a pragmatist. This is a good deal,” Mr Packer was quoted as saying from London by the Australian Financial Review.

“This proposal would suggest that my long-term interests lie in the entertainment and gaming side of my business,” he said.

Mr Packer has a 48 per cent stake in Crown, which owns Melbourne’s Crown Casino, and has built up a casino business in Macau in partnership with Hong Kong businessman Lawrence Ho.

He is renowned for his perfectly timed sale of the Nine Network TV in 2006 for A$4.5bn, one of the last big acquisitions by private equity before the financial crisis struck. The owners of Nine are now battling to refinance their debt.