Bruce Gordon has failed in an attempt to hold up CBS’s takeover of the Ten Network after the NSW Supreme Court ruled the embattled broadcaster’s administrator gave creditors sufficient information about his rival bid.
Lawyers for Mr Gordon’s interests had sought a declaration that KordaMentha failed to give creditors vital information about a joint bid by Mr Gordon and Lachlan Murdoch when it recommended a proposal by US media giant CBS.
But Justice Ashley Black on Monday ruled that KordaMentha had provided enough information as well as satisfactory reasons for backing CBS, casting serious doubt over the chances of success for the improved 11th-hour second bid lodged on Friday by Mr Gordon and Mr Murdoch.
The ruling means a vote on the CBS proposal can go ahead as planned on Tuesday at a second creditors meeting.
“It will be a matter for creditors at that meeting to determine whether [it] should be adjourned by reason of … any recent commercial developments, or for any other reason,” Justice Ashley Black said in his judgment.
Mr Gordon’s lawyers had argued the KordaMentha’s creditors’ report was deficient, namely because it only presented information about the CBS takeover bid, and not the joint bid from himself and Mr Murdoch.
A spokesman for the administrators has confirmed the meeting will go ahead, with creditors to be given the opportunity to vote on adjourning the meeting to allow further time to consider the Gordon-Murdoch offer.
CBS and 21st Century Fox, where Mr Murdoch is executive co-chair, are Ten’s largest creditors.
They are owed $348 million and $195 million, respectively, and their pricey historical content deals with Ten have been a significant factor in the financial problems that have driven the network into administration and a share trading halt since June.
Mr Murdoch and Mr Gordon had made a joint bid for Ten through their respective investment vehicles – Illyria and Birketu – but were trumped by CBS when it launched its surprise takeover in August.
They delivered a revised late bid to Ten’s administrators on Friday, hoping to sway the outcome by offering unsecured creditors up to $55 million compared to $32 million offered by CBS.
Justice Black also ruled that CBS would not be prevented from voting on its own bid for Ten at tomorrow’s meeting, or that its vote be restricted to the small nominal amount of $1.00.
The decisions of CBS and the group representing Ten employees will be critical in Tuesday’s meeting in deciding whether to adjourn or accept a bid, with those two parties having sufficient weight in debt and numbers to carry the vote.
-With AAP, ABC