The Federal Government has cut off the options of the controlling Asper family and its Canwest company of Canada, effectively stopping the sale of the Ten Network to a private buyout group.

In approving the move by Canwest to increase its stake from 14.9% to a controlling 56.7% interest Federal Treasurer Peter Costello said today that a number of conditions had been imposed “in the national interest”.

His statement and that from the Foreign Investment review Board listed the conditions as being:

  • That the CEO and CFO of Ten Holdings are to reside in Australia,
  • That Ten Holdings remains a listed company,
  • That the headquarters of Ten Holdings remains in Australia,
  • That the Board of Ten Holdings holds a majority of its meetings in Australia, and
  • That the majority of the Directors of Ten Holdings are Australian citizens.

“These conditions will have effect for so long as members of the CanWest Group of companies own a controlling interest in Ten Holdings and subject to any revocation or amendment by the Treasurer,” the treasurer’s statement said.

The conditions mean that unless approved by the Treasurer, any takeover offer for Ten would not be able to be completed or go unconditional because that would result in the company being delisted. It would mean some Australian shareholding would have to be maintained, as well as Australian management and board domination.

It will mean that an executive from Canwest cannot be parachuted into being chairman or Chief Financial Officer of Ten. Ten’s present chairman and CFO are Australian, as is the CEO.

For all intents and purposes, Canwest is now locked into Ten and cannot sell via a full takeover. The conditions, as they stand, disadvantage the minority shareholders in Ten.