Paul Mallam, the nominee of billionaire Bruce Gordon on the board of Ten Network Holdings has resigned suddenly from the board of the broadcaster, dealing a further twist to the takeover auction for the company – the initial deadline for which ends on Tuesday evening.
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In a statement to the ASX on Monday, Mr Mallam thanked the board and management and said that it had been "a great privilege working with them during the past four years, particularly during a challenging period".
"I would like to pay tribute to my fellow directors, who have addressed the issues facing the company in a disciplined and cohesive manner," Mr Mallam said.
"I also have nothing but praise for the focus and commitment of management and staff of Ten. Pleasingly, their efforts have repositioned the network and created a more competitive platform for 2015," Mr Mallam said.
His praise for fellow directors hints at a possible disagreement between Mr Mallam and Mr Gordon, who is Ten's largest shareholder. Mr Gordon could not be reached for comment at the time of writing.
The Australian Financial Review reported on Monday that Discovery Communications and Foxtel are preparing to lodge a joint takeover offer of between 25¢ and 30¢ a share for Ten Network Holdings amid signs that Mr Gordon is supportive of Foxtel taking a stake in the struggling broadcaster.
In accepting Mr Mallam's resignation, Ten's executive chairman Hamish McLennan, thanked hin for his contribution as a Ten director. Mr McLennan said: "Paul's vast experience as a leading adviser to the media, telecommunications and technology sectors has enabled him to provide great counsel and assistance to the board and we wish him well in the future."
After weeks of due diligence, including meetings with Ten's management, Discovery and Foxtel remain the frontrunners in the auction for Ten, although whether any bid is successful will depend on the view of its independent directors on the price offered.
The consortium's bid, which will not be fully binding, is expected to be greater than the 25¢ a share approach made by Time Warner to Ten's adviser Citi in October, but less than 30¢.
Bermuda-based billionaire Mr Gordon created a problem for potential bidders last month when he said he was "definitely not a seller".
However, as revealed by the Financial Review, Discovery and Foxtel's cash-and-share offer will include a dual-class shareholder structure for Ten which the consortium hopes will persuade the WIN Corp owner, and any other resistant shareholders, to approve.
It is now understood Mr Gordon would back Foxtel taking a stake. Sources close to the billionaire say he is supportive of the partnerships struck between the two broadcasters such as the next round of Formula 1 media rights for Australia.
Mr Gordon has argued Ten should remain in Australian hands and says he will not sell his stake "at any price".
The WIN deputy chairman made it clear he has doubts about the strategic merits of a US cable giant buying into Ten at "nickel and dime prices". It is believed these doubts apply to Discovery although he is highly unlikely to attempt to block any deal.
