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Gordon’s WIN Corp loses Ten case

Bruce Gordon’s WIN Corp and his investment firm Birketu have failed in their attempt to block CBS’s takeover of Australia’s stricken Network Ten.

Bruce Gordon

Gordon’s lawyers went to the New South Wales Supreme Court to seek a declaration that administrator KordaMentha’s report to creditors was deficient and failed to give adequate information about the joint bid from Gordon and Lachlan Murdoch.

Today the court dismissed the action, which had also asked for CBS, Ten’s biggest creditor, to have its voting rights removed or diluted.

On Monday afternoon Gordon and Murdoch said they will appeal the ruling in the Court of Appeal.

The decision paves the way for the second creditors meeting to go ahead tomorrow, after being delayed by one week due to the court hearing.

Last Thursday Gordon and Murdoch, who owned 22% of the broadcaster before it was placed in voluntary administration, lodged a new bid.

They offered Ten’s shareholders, who will get nothing if the CBS takeover proceeds, 25% equity in the restructured company, which would be relisted on the Australian Securities Exchange.

In addition, unsecured creditors would receive A$55m (US$44m), up from the A$35m that Gordon and Murdoch proposed originally.

That was more generous than the A$32m CBS agreed to pay in its binding agreement, which has been recommended KordaMentha.

Lachlan Murdoch

The revised bid would see CBS, which is owed A$348m under its output deal, receive A$20m, up from A$7.4m in the original Gordon/Murdoch offer.

In his ruling today, Supreme Court justice Ashley Black did not find any deficiencies in the KordaMentha report or that further information should be provided to creditors.

But Black pointedly said the court would not consider any “competing commercial proposal,” which is a matter for the creditors to decide.

KordaMentha has not yet sent the terms of the revised bid to creditors, who may well ask for an adjournment at tomorrow’s meeting so they can deliberate on the offer.

The administrator would then have to give the creditors five business days to consider the bid.

Black said it is “always open” to creditors to vote to adjourn the meeting. However, CBS and Ten’s employees, who collectively are the next biggest creditors, may well decide to use their voting power to reject any move to consider the offer.

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