Billionaire media owner Bruce Gordon and News Corporation scion Lachlan Murdoch have joined their holdings in the Ten Network, in a play that could ultimately see the pair take the business out of administration and into private hands.

In a change of substantial holding notice to the ASX, Mr Gordon's investment vehicle Birketu, which holds 15 per cent of Ten stock, announced a tie up with Mr Murdoch's 7.5 per cent stake held in his Illyria company.

The announcement was made public just hours after Ten entered voluntary administration, having failed to secure a guarantee for a new $250 million loan it had sought in order to continue its operations beyond Christmas.

However, the deal to treat the two separate holdings as an association was drawn up last Friday, before Ten was told the pair would not extend the guarantee.

Acting as an association, rather than a merged entity, the 22.5 per cent stake avoids triggering compulsory acquisition provisions in corporation law which come into effect once the 19.9 per cent threshold is breached.

Acting as an association also means there is no breach of the existing two-out-three cross media ownership laws.

The letter of agreement makes it clear that it does not constitute a move to take control of Ten.

The agreement commits the two investors to "negotiate and facilitate" a restructure.

The letter says there is a "commonality of interests in Ten as shareholder guarantors of Ten's debt" and it was in the pair's commercial interest to repay the debt over an appropriate period.

While the deal leaves Mr Murdoch and Mr Gordon in a strong position to take control should Ten emerge from administration and if media laws are changed, it also is a defensive measure given the high stakes involved.

It notes that in the event of a default by Ten, "there is a risk of Birketu and Illyria each being exposed to a significant liability under the respective guarantees together with a complete loss of the respective investments in Ten's equity".

Earlier, Ten's directors said administrators Korda Mentha would now work on plan to either sell or recapitalise the business.

In the meantime, Ten said it would be business as usual for the TV network as the administrators got to work.

Administrators called in as Gordon and Murdoch refuse to guarantee a lifeline

Ten stopped trading on the ASX yesterday after being told that key shareholders Lachlan Murdoch and Bruce Gordon would no longer support the ailing network's refinancing plans.

"The directors of Ten regret very much that these circumstances have come to pass," Ten said in a statement released to the ASX.

"They [the directors] wish to take this opportunity to thank all Ten employees and contractors for their commitment and enthusiasm for Ten's programs and business."

High-profile investors could drop $1 billion on the deal

The move is good news for the Commonwealth Bank, which will retrieve a $200 million loan that was due to expire just before Christmas, and was underwritten by private companies owned by Mr Murdoch, Mr Gordon and James Packer.

However, it is bad news for shareholders who face the prospect of losing the entire value of their investments.

While there are around 17,000 investors on Ten's share register, the bulk of the pain will be felt by several high-wealth individuals including Gina Rinehart and Kerry Stokes who have money in the game.

It is believed the biggest shareholders, who built up their stakes when Ten's share price was at far loftier levels than its 16 cent closing price on Friday, stand to lose in the order of $1 billion.

Company name Principal investor Percentage stake Value Birketu Pty Ltd Bruce Gordon 15pc $8.7m Foxtel Management Foxtel 13.9pc $8.1m Hanrine Investments Gina Rinehart 8.3pc $4.6m Aidem Holdings James Packer 7.5pc $4.4m Illyria Lachlan Murdoch 7.5pc $4.4m Network Investment Holdings Kerry Stokes 3.1pc $1.7m

Ten went ahead with the move despite saying it had made significant progress in improving future earnings by $50 million in the 2018 financial year, and $80 million in 2019.

The company said while negotiations had not been finalised, it was on track to halve its future liabilities in the expensive and onerous content deals with US studios, 20th Century Fox and CBS.

Ten noted a reduction in licence costs could reap in the order of $34 million over the next two years if passed by Parliament.

Ten investors have watched the value of their holdings fall by more than 80 per cent since the start of the year. The company peaked at more than $32 a share in 2005.