Austar confirms Foxtel interest, says no bid yet

Satellite pay TV company Austar (ASX:AUN) said it understands Foxtel is indeed discussing submitting a takeover bid, but has not yet done so

Satellite television services provider Austar (ASX:AUN) has acknowledged speculation that its larger rival, Foxtel, is mulling a takeover.

In a market announcement, Austar said it had understood that there had been verbal discussions between Foxtel and controlling Austar shareholder Liberty Media in relation to a possible acquisition.

But it added that it had not received a proposal, and that there was no guarantee that the discussions will lead to one.

The company was responding to reports claiming that Foxtel's largest shareholder, Telstra, (ASX:TLS) had leant its considerable weight to the potential deal.

Telstra has blocked Foxtel's attempts at an Austar takeover twice previously – in 2005 and 2007.

Austar has around 760,000 subscribers, a bit less than half of Foxtel's estimated total.

Any deal could face scrutiny from regulators, as a combined entry would be left with little meaningful competition in the pay TV market.

AUS shares shot up 10.6 per cent to $1.250 following the reports and the subsequent announcement. At the time the speculation started in February, AUS shares soared from below $0.950 to above $1.150.

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More about: Austar, Foxtel, Liberty Media, Telstra
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