The proposed disinvestment of Austar United Communications Ltd. by Liberty Global Inc. (LBTYA) is delayed further. Recently, the Australian Foreign Investment Review Board (FIRB) extended the review of the proposed takeover of Austar by Foxtel for another 3 months. The FIRB is waiting for the Australian regulatory authority to take a firm decision on the proposed merger.
In July 2011, Liberty Global decided to divest its operations in Australia. Austar, in which Liberty Global holds a 54% stake, entered into a definitive agreement with Foxtel, to be taken over by it for approximately $2.1 billion. Liberty Global will get around $1.1 billion. Foxtel is jointly held by Australian telecom giant Telstra, News Ltd., a division of News Corp. (NWSA), and Consolidated Media Holdings.
All these three shareholders have agreed to the deal. However, several industry sources predicted that the Australian regulatory authority was initially reluctant to clear the deal as it had the makings of a monopoly. Foxtel is the largest pay-TV operator in Australia and Austar is also a leading pay-TV operator.
Disinvestment of Austar indicates that Liberty Global will concentrate solely on Europe and some parts of Latin America. From early 2010, Liberty Global is gradually concentrating on strengthening its foothold in Europe through a series of mergers and acquisitions.
Liberty Global continues to suffer setbacks to its ongoing business restructuring strategy. During the last couple of years, Liberty Global was reorganizing its operations through acquisitions of new businesses and disinvestments of its existing set-ups. However, things have turned out to be a little difficult in the last four months.
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