The AGM of booming regional pay-TV company Austar at Sydney’s Powerhouse Museum this morning was a lively 65-minute affair, but the company refused requests to acknowledge the elephant in the room – recent merger negotiations with Foxtel.

After chairman Mike Fries declined to name Foxtel, I cited this recent Mark Day article in The Australian as an obvious example of quotes from News Ltd, presumably Day’s farm-owning colleague John Hartigan, discussing in detail how the merger negotiations panned out.

Media analyst Roger Colman also tried to extract some information about the potential for $50 million in merger synergies, but Fries refused to bite.

There was still plenty of scope for some lively debate, especially when the independent shareholders lodged huge protest votes against the remuneration report and the re-election of 80-year US pay-TV pioneer Gene Schneider.

Schneider and Rupert Murdoch’s nemesis John Malone used to be very close Denver buddies, but then Austar almost sent the Schneider interests to the wall. John Malone and Australian private equity firm CHAMP stepped in to bail it out of bankruptcy in 2003 and the private equity boys walked away with a profit of about $400 million in 2005.

Part of the bailout saw Malone’s Liberty group step up to the plate and then move to a majority position when the private equity boys walked away at an average price of about $1.10 – well short of today’s $1.67.

Malone and Schneider are not thought to be quite so close these days, but their combined interest in a majority share of Austar is tracking along very nicely from its regional monopoly and world-class revenue per customer figure of almost $80 a month.

Whilst the plunging Australian dollar contributed to Austar’s near-failure four years ago, the key sports and movies contracts are now in Australian dollars. However, they’ve hedged about 60% of their remaining US dollar dealings at US75c, which explains a $2.3 million currency loss last year and an expected larger loss this year.

The proxy advisory firms clearly took issue with Austar’s lucrative B class management shares scheme that has delivered more than $20 million in net profits to CEO John Porter and his executive team.

A hefty 180 million of about 400 million non-Malone shares were voted against the remuneration report, yet the Macquarie Banker who chairs the remuneration committee, Tim Downing, admitted to never having discussed pay policies with any institutional shareholder. Time to start, Tim, as this was quite a protest.