What: Shares in Ten Network Holdings Limited (ASX: TEN) jumped 3.5% on Wednesday after a report in The Australian Financial Review suggested that Lachlan Murdoch was looking to sell his privately owned radio network Nova Entertainment.
So what: A sale of Nova is expected to net around $400 million which would be a tidy profit for the son of billionaire media mogul Rupert Murdoch – Lachlan Murdoch is believed to have paid about $212 million for the radio assets.
Of even more importance is what a sale of Nova means for shareholders of both Ten Network and News Corp (ASX: NWS). Due to current Australian regulatory restrictions, a person or company is limited by the "2 out of 3 rule" which limits control of newspaper, television and radio assets to just two in any one market.
Now what: Ten's shares have now gained 13.5% in the past month, however if Mr Murdoch's intention from selling Nova was to open up the potential for News Corp to make a play for Ten then there could be a lot more upside to come.
Indeed with the Liberal Government expected to move to reform the current restrictions on media ownership, a number of media stocks including Prime Media Group Limited (ASX: PRT) and APN News and Media Limited (ASX: APN) could find themselves swept up in consolidation activity.
