The Network Ten restructure was one of the most hotly contested corporate transactions in recent Australian history. With highly sophisticated commercial media players fighting for control of Network Ten, politicians debated overdue reforms to media law in Australia. The outcome of the debate in the Australian parliament had a direct impact on the eventual bid proposals that were submitted for Network Ten.
MinterEllison was the sole legal adviser to the receivers and managers appointed to Network Ten (an ASX-listed Australian media group) on all aspects of its widely publicised receivership and subsequent sale to CBS in 2017. Network Ten is one of only three commercial free-to-air television networks in Australia, and arguably the biggest producer of 'home grown' Australian broadcast content for a general (non-family) audience.
The complexity of the deal required seamless, expert legal advice on restructuring and insolvency, corporate M&A, banking and finance, competition and regulatory engagement with ACMA, ACCC, ASIC, ASX and FIRB – all delivered in the context of the unique and politically sensitive Australian media landscape.
The case also involved contentious litigation in the New South Wales Supreme Court and the Federal Court of Australia, which resulted in several precedent-setting judgments that clarified the law relating to administrator independence and pre-appointment conflicts of interest, extensions of registration time for PPSA security interests, creditors' meetings and shareholder voting rights in administration, and the Court's jurisdiction to approve compulsory share transfers under section 444GA of the Corporations Act.
A great outcome for Network Ten
Our end-to-end involvement in the case included advising Network Ten's receivers and managers, PPB Advisory (now PricewaterhouseCoopers), from their appointment through to the finalisation of the transfer of shares to the successful bidder. The process commenced on 30 June 2017, and due to financing restrictions, PPB Advisory had to work within a strict eight-week timetable to secure a sale of assets or otherwise refinance Network Ten's secured debt.
The sale and recapitalisation process culminated in Network Ten entering an arrangement with NYSE-listed US television network giant CBS in late August 2017. CBS was Network Ten's largest unsecured trade creditor, with a claim worth A$843m. The refinancing component of the transaction was completed on 1 September 2017, with CBS funding a A$143m facility to refinance Ten Network's secured debt (including shareholder guarantor fees) and a working capital facility of A$30m.
The process was finalised in November 2017, when an application was made to the courts for orders directing the transfer of all shares in the Network Ten in favour of CBS.