Some of Australia’s best known billionaires – Lachlan Murdoch, Bruce Gordon, James Packer and Gina Rinehart – face losses in the hundreds of millions after the administrators of channel Ten declared the shares in the third rated network worthless.



Administrators KordaMentha released an experts’ report by KPMG late on Tuesday, confirming that, after creditors are paid under the scheme of arrangement put forward by US network CBS, the equity in Ten is worth nothing.

The administrators will now apply to the NSW supreme court to resume the shares in a hearing set down for three days from 31 October. Shareholders can make representations, providing one last forum for investors to fight to salvage something from the collapsed network.

But the KPMG report likely spells the end of an intensely embarrassing saga for the wealthy foursome, which was capped off when CBS blindsided Gordon and Murdoch and lodged a rival plan to buy out the network in receivership. The CBS plan was preferred by a vast majority of creditors, including Ten’s staff.



The KPMG report says that even under the “high case” scenario for net present value, the equity is worth zero, once claims by trade creditors are taken into account. It says the implied value of the equity is negative to the tune of $529.2m to $543.7 m and the “high case” is optimistic because it assumes 80% of identified savings are delivered and that Ten would be able to renegotiate its program deals on the terms it had proposed.

The biggest loser will be Bruce Gordon, whose Birketu Investments and associated companies hold nearly 15% of Ten. It is difficult to quantify his loss as he bought shares over a period of time, but it is in the hundreds of millions.



Ten’s shares have been a downhill ride for investors. After reaching a high of $32 a share in 2005, they crashed to just 16c before the company was put into administration in June – and that was after a 10 for 1 buyback.



James Packer has also lost millions, though he began selling down in early 2017 before Ten plunged into receivership.



He bought an 18% stake in October 2010 at $1.50 a share, paying around $244m.

Within weeks he offloaded half of that stake to Lachlan Murdoch’s investment company Illyria and the two set about trying to revitalise the ailing third network, to no avail. Murdoch’s stake, once worth $130m, is now worthless.

Gina Rinehart, Australia’s richest woman, soon followed the two media scions into Ten’s share register, paying $157m for 8.65 of the company. It too is worthless.

The other major investor was Foxtel Management which has close to 14%.

But mum and dad investors, who worked on the principle of follow the money, have also lost millions. There have been murmurings of a class action, particularly as there appeared to be a lag between the decision by James Packer not to loan further funds to Ten and advice to the sharemarket.

The question now is whether the Gordon and Murdoch interests have one last attempt at overturning the sale to CBS through the courts. CBS and the administrators must seek the court’s permission to resume the Ten shares on offer – a move that is usually routine, but may not be in this case.

Both Murdoch and Gordon have labelled the deal to sell Ten to CBS a bad outcome for shareholders, and said under their rival bid, shareholders would have kept 25% of their equity, with Ten relisted.

But an earlier attempt to halt the creditors’ meeting on the grounds that the administrators, KordaMentha had failed to present their bid to creditors, failed comprehensively. The same judge, Justice Ashley Black is listed to sit on the next stage of proceedings.

However the CBS deal did ensure there was a repayment of loans to the Commonwealth Bank, and to Packer and Murdoch, while 21st century Fox will get a partial payment for program rights. Ten staff, the largest number of creditors, will get their full entitlements.