does foxtel want to buy ten ,takeover target..

Leading investment banks have sounded out interest among media companies for Lachlan Murdoch's radio business Nova Entertainment, which could lead to a $190 million pay day for the media mogul. Bankers have approached at least one media company in recent months in the hope of finding a buyer for the operator of the Nova and Smooth FM networks.

It is thought that banks have not been mandated at this stage and there is no guarantee of a sale. However, one media executive said: ''They were certainly under the impression Lachlan is a seller at the right price.''

Nova FM overtook 2Day FM last year as the top-rating network across the five metropolitan markets. It is believed Mr Murdoch would want at least $400 million, which reflects a multiple of 10 times earnings before interest, tax, depreciation and amortisation in 2013, although it has been reported the company is forecasting EBITDA of $50 million to $60 million for 2015.

Mr Murdoch's private investment firm Illyria paid about $112 million for half of the business from the Daily Mail and General Trust in 2009 when it recorded EBITDA of $16 million.

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Illyria took full control of the business in 2012 for a reported $100 million.

Mr Murdoch rejoined his father Rupert Murdoch's companies, News Corporation and 21st Century Fox, as co-chairman in March, and was required to resign as chairman of Ten Network Holdings due to media regulation.

There has been much speculation that News Corp, or its half-owned pay TV business Foxtel, wants to buy Ten.

Mr Murdoch would have to sell Nova if a deal was to happen under current regulation due to the ''two out of three rule'', which prevents anyone from controlling more than two of a newspaper, TV station and radio licence in the same market.

News has consistently denied any interest in Ten.

APN News & Media bought the half of Australian Radio Network it did not already own for $247 million in February, reflecting a multiple of about seven times EBITDA on an enterprise value basis. It was considered a good deal for APN, with some analysts saying the business was worth as much as 10 times EBITDA.

Communications Minister Malcolm Turnbull is expected to put a media reform package to Parliament this year, with the two-out-of three and reach rules expected to be high on the agenda.

The abolition of the reach rule - which prevents free-to-air television networks merging with their regional affiliates - is considered more likely to be passed because there is a perception repealing cross-media ownership rules could benefit News Corp, which has had long running battles with the Labor Party, the Greens and the Palmer United Party. Fairfax Media reported last month that Britain's ITV held talks with Ten - of which Mr Murdoch has an 8.8 per cent - about taking a strategic stake in the broadcaster.

Sources described those discussions as preliminary and said they had ''not gone anywhere'' but ''there was no doubt there are parties kicking the tyres'' before potential changes to regulation that would make it easier for Australian commercial broadcasters to merge with their regional counterparts.

US network CBS, which supplies Ten content, was also reported to have explored strategic options with Ten. Mr Murdoch was unavailable for comment


Read more: http://www.smh.com.au/business/nova-entertainment-could-produce-190m-pay-day-for-lachlan-murdoch-20140604-39je0.html#ixzz33nTX2hxw