Discovery Communications 'Lowball' Offer To Acquire Australian Network Likely To Be Rejected

According to The Australian, Discovery Communications Inc. DISCA and Foxtel could see their offer to acquire Australian based Network Ten for $510 million to $664 million rejected.

Network Ten is the third Australian commercial free-to-air television network. The network has been attempting to rebrand its programs and news service over the past few years.

The publication states that Discovery and Foxtel presented a "lowball" takeover for Ten Network at A$0.20 to A$0.25 per share, compared to Monday's closing price of A$0.255.

Advisers to Discovery and Foxtel believe that a lack of other serious bidders and future investments to rebuild the network's ratings after a deal closes justifies the low offer.

Sources close to major Ten shareholders told The Australian that the best course of action may be to "sit tight for now" as the offer on the table does not maximize shareholder value.