Ten confirms Foxtel talks

Struggling Australia broadcaster Network Ten has confirmed it is in discussions about selling a stake in its business to dominant pay TV platform Foxtel.

Ten’s version of Gogglebox

The company told the Australian Securities Exchange today that a strategic review it initiated late last year continues and could result in a transaction acceptable to the board.

It said one component involves talks with Foxtel about the terms under which it may potentially invest in Ten.

However, Ten repeated earlier statements urging caution in dealing in its shares on the basis of media speculation about potential transactions.

Fairfax media reported that Foxtel is prepared to invest A$85m (US$66.4m) in a 14.9% stake priced at 18 cents a share. Today, the shares were trading at 21 cents.

Foxtel is still keen to acquire a stake in Ten, although its largest shareholder, Bermuda-based billionaire Bruce Gordon, rejected a joint bid from the News Corp-owned unit and Discovery Communications, prompting Discovery to withdraw.

Analysts expect Ten’s half-yearly results on Thursday to show an improvement in its advertising share following a lift in ratings from such shows as I’m a Celebrity… Get Me Out of Here!, Shark Tank and Gogglebox .

But some think Ten’s revenues will decline by about 5% due to the lag between a rise in ratings and the impact on ad sales, and forecast a full-year pre-tax loss of A$26m.