Australian media and gaming giant Publishing and Broadcasting Ltd said yesterday it was selling half its media assets for A$4.5 billion (US$3.4 billion) as a major shake-up in the industry gathers pace.
The move will allow the company to ramp up its international gambling interests and prepare for further changes in the media sector as a new law relaxing ownership rules come into effect.
PBL, owned by Australia's richest man, James Packer, said private equity group CVC Asia Pacific will take a 50 percent share in a new company, PBL Media Ltd, which would be Australia's largest diversified media group.
PBL Media will include Nine Network television and its interest in Sky News, plus the vast ACP Magazines stable, PBL's 50 percent interest in ninemsn with Microsoft, and its 41 percent shareholding in internet site carsales.com.au.
PBL will retain other media assets including large stakes in pay TV group Foxtel, online job Web site Seek and Hoyts Cinemas.
Packer said the restructuring would help the company achieve its ambition to expand its international gaming interests.
PBL already owns Melbourne's Crown Casino and the Burswood Casino in Perth, and is part of a massive three-casino joint venture project in Macau with Lawrence Ho's Hong Kong-listed Melco International.
PBL last week also joined a consortium ready to spend US$3.5 billion if it wins the license to build Singapore's second casino.
"Over the last 12 months we've strongly indicated our desire to invest in new opportunities," said Packer, PBL's executive chairman. "The restructure will provide the capital and flexibility necessary for the company to achieve its ambition to expand its international gaming interests."
"For PBL it releases cash at a time when there is a land-grab underway for gaming and entertainment assets around the world," he added.
The spin-off of PBL's media interests is also expected to set the new company up to make acquisitions under new Australian media ownership laws, with a takeover of the Fairfax newspaper group widely tipped.
Fairfax publishes the Sydney Morning Herald, the Age in Melbourne and the Australian Financial Review.
The new legislation clears media companies to own two, not just one, out of three mediums -- newspapers, radio and television -- in any single market, and will allow foreign ownership.
The laws were approved by parliament just hours before PBL's announcement but a date has yet to be set for when they will come into effect.
Packer said in a statement that until the legislation becomes effective, PBL will continue to control the Nine Network.
"PBL will also continue to control Ninemsn in its joint venture with Microsoft. John Alexander will act as executive chairman of PBL Media and will continue as chief executive officer of PBL. Ian Law will be chief executive officer of PBL Media," it said.
The transaction is expected to be completed early next year, depending on any regulatory or other approvals that may be required, Packer said.