Ten Network Holdings executive chairman Hamish McLennan has dismissed suggestions that a joint 23¢ a share offer by Discovery and Foxtel is the sole option available for the broadcaster as it considers four takeover approaches.
Ten remained otherwise tight-lipped about the ongoing auction for the company being run by its adviser Citi Group at the opening of a testy annual meeting in Sydney, which could be its last as a publicly listed company.
Lead independent director Brian Long insisted that the company did not need to accept a takeover bid in order to transform its performance, saying there were no "going concern issues or questions" with regard to Ten.
But speaking publicly for the first time on the ongoing auction by Ten's adviser Citi, Mr Long admitted the third-ranked commercial free-to-air needed to "improve overall performance".
Mr McLennan, who was promoted to executive chairman in March when Lachlan Murdoch left to become co-chairman of his father's News Corporation, stressed there is no guarantee any announcement will be made, saying "there is no commitment either way that anything will happen".
A joint 23¢-a-share offer from US cable TV giant Discovery Communications and local pay TV monopoly Foxtel is the favourite bid to succeed. Ten has also received offers from New York-based fund manager Anchorage Capital Group, United States-based acquisition vehicle Silver Eagle and American television network turnaround specialist Saban Capital Group, which is being helped by Former Nine Network chief Jeff Browne and has offered less than Foxtel but believes it has a better deal structure.
In answer to a question about the Discovery and Foxtel approach, Mr McLennan said: "The company is looking at a multitude of options and we are not steering the company in any direction. We are looking at the best option for the company and for all shareholders."
Three independent directors on a subcommittee of the Ten board are considering the approaches. They are Mr Long, David Gordon, founding Lexicon Partners, an independent corporate advisory and investment firm and Dean Hawkins, a strategic adviser to the media industry and chairman at Skins Consolidated, maker of Skins sports compression garments. The subcommittee will make any recommendations to the board, which will then vote on any proposals before the company makes news on the bids public.
Any proposal will also require the approval of Ten's four billionaire shareholders: WIN owner and Bermuda-based billionaire Bruce Gordon, who attended the two-hour meeting and left before the end; former chairman Lachlan Murdoch, whose interests are represented on the board of Ten by his long-time adviser Siobhan McKenna; Crown chairman James Packer; and mining billionaire Gina Rinehart, who was represented on the board by John Klepec, chief development officer at Hancock Prospecting.
Mr Klepec was elected as her representative. He took over from Ms Rinehart on the board last month, having attended 10 meetings in her absence in the last financial year.
"There are 256 million reasons why I should be on the board of the company," said Mr Klepec, when asked by Mr McLennan to explain to investors why he should be re-elected. "We have an interest in regaining the performance of a company to a level that enables the share price to increase from where it is at the moment.
"It's public knowledge that we are well under water from our initial acquisition price and we'll do everything necessary to help the company to get back to where it should be."
Hungry Jacks founder Jack Cowin was also re-elected to the board. He said he operated independently of his close friend Mrs Rinehart and represented the interests of all shareholders.
Mr Cowin said a director looking after the interests of minority and smaller shareholders was an important part in examining takeover proposals for the company.
"We have an unusual company structure which has been described as having four cornerstone investors," Mr Cowin said. "In the process of examining what our alternatives are, I have an interest in what happens to the minority shareholders and smaller shareholders to make sure everyone is treated equally".
Mr Cowin also defended his role as a director of Fairfax Media, owner of the Australian Financial Review, saying, "Fairfax and Ten are both in the media business. I have not seen a situation arise whereby I have been in a position of conflict and if that arises I would remove myself from the room.
"I agree there is a potential conflict which has to be managed appropriately."
Mr Long said the board was taking "a prudent approach, looking at all the options" after it received a number of non-binding, conditional proposals which could result in a change of control of Ten or a refinancing of its existing debt facilities. "The [television] industry is a difficult industry because the revenue that free-to-air television is experiencing is being challenged by other revenue sources ... Our brief to the advisers is to think about all the options open to the company. We want to get the company on what we think is the best sustainable footing we can get to."