Page last updated at 15:09 GMT, Tuesday, 8 April 2008 16:09 UK

Packer and Murdoch deal collapses

Lachlan Murdoch (L) and James Packer
The chances of a new deal between the pair are slim, analysts say

A 3.3bn Australian dollar (£1.5bn) offer for Consolidated Media Holdings by the sons of two of Australia's greatest entrepreneurs has collapsed.

The joint deal between Lachlan Murdoch and James Packer fell apart as the sides failed to agree funding terms.

For Mr Murdoch, it would have been his first major deal since leaving his father Rupert's business, News Corp - although he is still a director of it.

Mr Packer split his late father Kerry's media and gambling firms last year.

Consolidated Media, formed by that split, is 37% owned by Mr Packer's Consolidated Press Holdings.

Among its assets are a 25% stake in the pay-TV provider Foxtel and about 27% of the internet job site Seek.

Expensive acquisitions

Consolidated's shares fell by 11% on news of the deal collapse - which some observers had been predicting after key financial backer SPO Partners & Co pulled out last month.

The global credit crunch has made it much more costly to finance borrowing, so debt-funded acquisitions have become increasingly expensive.

"Given the current climate, we think a deal is looking less likely in the near term," said Merrill Lynch analyst Alice Bennett.

The proposed deal had been the second time that the two media empires had tried to work together.

The first was the Australian telecoms firm One.Tel, which ended up losing the two companies about 1bn Australian dollars.

Lachlan Murdoch and James Packer were both non-executive directors of One.Tel.


SEE ALSO
Packer and Murdoch in joint offer
21 Jan 08 |  Business
Australian media set for shake-up
18 Oct 06 |  Business
Fox helps boost News Corp profits
10 Aug 05 |  Business
Murdoch 'heir' to quit News Corp
29 Jul 05 |  Business

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