Oz exhibs get greenlight
Condition: Two must sell stakes within 18 months
Two must sell their stakes within 18 months of the acquisition, the Australian Competition and Consumer Commission said Monday.
The ACCC agreed to the deal after accepting that the alternative would have been placing Val Morgan under administration (similar to bankruptcy protection).
Its parent, Television & Media Services, has been negotiating to unload its money-losing subsid, which would pave the way for a restructuring that will leave the company with its profitable facilities biz Global Television.
Val Morgan was on the brink of collapse after buying its competitor, Media Entertainment Group, and being saddled with high cinema rents amid a slowdown in ad revenues.
The ACCC did not say which of the three exhibs (they collectively control 75% of the exhib market) must divest their shares in Val Morgan.
The chains agreed to court-enforceable undertakings -- including honoring contracts with indie cinemas and thereafter guaranteeing them minimum contractual terms -- to secure the ACCC's approval.
Deal is expected to close later this week.
