PBL shares hold up better than expected

The Packer family's Publishing & Broadcasting Ltd took a dive in early trade on the news of Kerry Packer's death but defied analysts by edging back up.

PBL shares shed 26Ac, or 1.6 per cent, before regaining 5Ac to close at A$16.40 ($17.50) after analysts predicting the shares could lose between 5 per cent and 10 per cent.

However, the clear succession in place at the company, which means son James will take control of the sprawling business empire, kept the foundations steady.

Macquarie Bank media analyst Alex Pollak, putting the early sell-off down to a knee-jerk reaction, did not expect the share to stay off for long.

"People who understand the company will just look through that and say 'What's changed?' Kerry hasn't really been driving the strategy for the last couple of years."

He said James Packer had been the driving force behind the company's expansion into internet businesses such as nineMSN, a venture with Microsoft, and casinos in the past years.

James Packer is taking over at the company as it moves to expand in Asia and revive ratings at Australia's most-watched television station, Channel Nine.

"He's been a highly able successor before his father died," Pollak said. "While Kerry's had a huge input into the company, over the last couple of years it's been put on a professional management basis, and they turned it into much more than just Kerry Packer's company."

Andrew King, at Investors Mutual, said James Packer had a strong management team to draw upon.

"If this had happened 10 years ago, it might have been different but, during the past decade, James has stepped up, proving himself," he said.

Chief executive officer John Alexander is a 37-year media veteran and casino boss Rowan Craigie has worked in the gaming industry for more than 12 years. Sam Chisholm, a former chief executive of Rupert Murdoch's British Sky Broadcasting, was appointed head of TV in May, returning to the position he held from 1975 to 1990 to try to stem a decline in ratings, which saw Nine's prime-time audience share fall to 29.2 per cent this year from 29.9 per cent in 2004.

James Packer said in August he intended holding on to the TV business. "One of the rationales is that if you can have a number of divisions then occasionally one of them can miss a beat and the company as a whole can still grow strongly," he said.

The young Packer does have one stonker on his copybook, an investment in failed telephone company One.Tel that forced PBL to take a A$397 million hit on its earnings in 2001.

James Packer, who invested in One.Tel with fellow media-magnate son Lachlan Murdoch, said at the time of the collapse he'd been "profoundly misled" about its finances.

Last month, he told a Sydney court that he had little recollection of the events leading up to the company's failure.

- BLOOMBERG