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A review by CanWest Global Communications of its Australasian media assets has opened up prospects for closer ties between its networks TV3 and Australia's Network Ten.
CanWest's Canadian bosses appointed Citibank Global Markets on October 24 to review its South Pacific assets as part of Australia's loosening of media ownership laws.
The move signals the Canadian group wants to sell Australasian assets, including its 70 per cent stake in CanWest New Zealand, which owns TV3, C4, eight radio brands and 56 per cent of Network Ten.
ABN Amro Sydney media analyst Fraser McLeish said the review would aim at getting the best price, by selling Australia and New Zealand together or breaking them up. The first option raises the prospect of closer relations between the Australian and New Zealand operations.
The chief executive of CanWest MediaWorks New Zealand, Brent Impey, said all options were on the table. But he said there were dangers in combining cross-border operations.
The current relationship was a co-operative as opposed to an alliance.
Ten and CanWest had been run independently in an approach that had worked well for CanWest operations internationally.
Until recently, Ten and TV3 had aimed at different demographics but Ten had recently adjusted to the same target audience of 18-49.
"But the market dynamics are different. A key factor is TV3 performance built around 3 News and Campbell Live, where Ten has a bulletin each night before 6pm," Impey said.
The radio markets in each country are also different with deregulation in New Zealand leading to radio being controlled by CanWest and The Radio Network, a joint venture between Clear channel and APN News and Media.
A source said it was unlikely that CanWest would retain ownership of CanWest New Zealand while selling off Ten. The company has sold its television interests in Ireland and was reported to be looking at more investments in Canada. "The scale of the Australasian investment would change," said the source.
At the moment a CanWest Canadian-based executive attends board meetings in Australia and New Zealand, flying from Winnipeg every three months. "Would he do that with New Zealand on its own?"
UBS analyst David Lane said the current share price of $1.82 was at a premium due to takeover speculation.
