What: The Australian Competition and Consumer Commission (ACCC) has announced that it will not oppose the proposed acquisitions involving Foxtel and Ten Network Holdings Limited (ASX: TEN).
So What: There were three proposals which the ACCC ruled on.
First, the proposal by pay-television provider Foxtel – which is a business jointly owned by Telstra Corporation Ltd (ASX: TLS) and News Corp (ASX: NWS) – to acquire 15% in free-to-air (FTA) television network owner Ten Network.
Second, a proposal by Ten to acquire a 24.99% stake in Foxtel's advertising agency Multi-Channel Network (MCN).
Third, an option for Ten to acquire a 10% holding in streaming service Presto.
Now What: The all clear should arguably be good news for all parties.
From Telstra and News Corp's point of view it creates a potentially stronger and more integrated Foxtel platform which is desperately needed in the face of increased competition from the likes of Netflix.
Meanwhile, with Ten's share price down nearly 90% in the past five years the market has obviously written the company off. Something needs to change for the company if it has any hope of creating some shareholder value from this point forward.
Given the flat share price post the ACCC's announcement it would appear the market is going to need more convincing that a brighter future lies ahead for the FTA operator.
Much of the established listed media sector remains under a cloud of structural adjustment however there could be other, profitable ways to gain exposure to the media sector. Investors who look outside the majors and consider some of the smaller, disruptive, new, tech savvy businesses could potentially find high-growth investment opportunities.
