Last week we reported on how Foxtel was mulling over a bid for regional TV player Austar. But now this looks ever more likely to happen as the digital TV giant’s biggest shareholder- Telstra- has given the green light for a possible takeover, according to The Australian Financial Review.
Foxtel’s other major shareholder, Consolidated Media, which owns 25 per cent, as well as Rupert Murdoch News Corp, have also given their backing to the move “in principal”.
This is a turnaround for the telco, who previously blocked moves toward an Austar takeover in 2005 and 2007.
However, Austar say no deal has been done but did confirm discussions are underway.
“No assurance can be given that those discussions will lead to a proposal being put to Austar or its shareholders,” it said in a statement today.
Austar CEO, John Porter has gone on record as voicing his support for the deal, declaring there was “so much compelling industrial logic” to a merger deal with Foxtel.
All three of Foxtel’s owners are said to be attracted to the huge costs savings the move would afford, which could prove a major carrot in particular given the flat growth digital TV is experiencing at present due to the crescendo of free-to-air channels hitting Oz screens.
Foxtel also refused to comment on the deal, although agreeing there had “been some speculative commentary recently”. “It’s speculative and we don’t comment on speculative commentary,” Porter added.
However, what will this all mean for subscription TV viewers?
A monopolised pay TV sector is one outcome as there are few other players apart from the big two.
Austar currently has over 764,000 subscribers while Foxtel has double that at over 1.6 million.