Pay TV broadcaster Foxtel says it has secured its $2.5 billion takeover for Austar, in a move to shore up its hold on the sector in the face of competition from free-to-air channels.
Austar said its listed entity, Austar United Communications, had entered into definitive transaction agreements with parent shareholder, Liberty Global Inc, and Foxtel Management, under which Foxtel would acquire Austar by a series of transactions, including a scheme of arrangement.
Under the terms of the proposed transaction, all Austar shareholders will receive $1.52 in cash per share.
The deal values Austar at an enterprise value of $2.5 billion.
The independent directors of Austar unanimously recommended that Austar minority shareholders vote in favour of the scheme and associated shareholder resolutions.
The recommendations were made in the absence of a superior proposal, and the bid was subject to an independent expert concluding that the scheme was in the best interests of Austar minority shareholders.
At least 75 per cent of the minority Austar shareholders must approve the scheme at a proposed scheme meeting later this year.
Foxtel's major shareholders, Telstra, Rupert Murdoch's News Corp and James Packer's Consolidated Media Holdings, have already endorsed the bid.