Foxtel will take a 15 per cent stake in Ten Network as part of a long-awaited deal to strengthen the struggling free-to-air broadcaster.
Ten expects to raise $154 million through the issuance of new shares at 15 cents per share, with half of the offer being taken up by Foxtel and the remainder to be taken up by existing Ten shareholders.
Its shares were down one cent to 25.5 cents as on 1010 AEST.
The move will see Foxtel emerge with a roughly 15 per cent stake in Ten, while Ten will take a 24.99 per cent stake in Foxtel’s advertising business, Multi Channel Network.
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Ten will also have to option to become a 10 per cent shareholder in Foxtel’s online streaming venture Presto within two years.
Meanwhile, a representative of Foxtel will be appointed to Ten’s board of directors.
Chief executive Hamish McLennan said the new arrangements would allow the third-placed free-to-air network to better compete with rivals.
“The board believes the agreements with Foxtel and MCN will materially enhance Ten’s business and better equip it to respond to the challenges of the ever-changing media and advertising landscape,” he said.
McLennan said Ten’s prime time audience share had increased 18 per cent on its main channel so far this year.
