Ten Agrees Sale Of OOH Arm

Ten Network Holdings (ASX: TEN) (“TEN” or the “Company”) today announces it has entered into an agreement to sell EYE Corp Pty Limited (“EYE”) to Outdoor Media Operations Pty Limited (“OMO”), the owner of oOh!media Pty Limited, an Australian outdoor advertising specialist. OMO is controlled by Champ Private Equity.

The transaction will incorporate EYE’s Australian and New Zealand businesses, as well as the US, UK and Indonesian operations. The transaction values EYE, excluding retained Australian onerous contracts noted below, at up to $145 million. This will comprise gross cash proceeds of up to $120 million at completion and deferred consideration of $25 million payable three years post completion. The final cash proceeds will be subject to adjustments in respect of the sale proceeds of the US and UK operations, as set out below, and for agreed working capital levels, capital expenditure obligations, and transaction costs.

Certain of EYE’s Australian onerous contracts will be retained by TEN but the operation of the relevant assets will be subcontracted to OMO. The net present value of these onerous contracts is estimated to be approximately $16 million.

OMO, with the assistance of TEN, intends to sell the US and UK operations of EYE to appropriate third parties. In the event that either or both of these operations are not sold within an agreed timeframe, TEN may choose, or be required, to reacquire them from OMO for nominal consideration. TEN will have an economic exposure to the outcome of the sale of the US and UK operations and, until sold, the funding of those operations.

TEN’s Chief Executive and Managing Director, James Warburton, said: “We are pleased with the outcome of the strategic review of EYE that was announced on March 19.

“Successful completion of the transaction with OMO will be good news for TEN. It will make our balance sheet stronger by further reducing debt and will give us additional opportunity to invest in the creative renewal of TEN’s television content.”

TEN intends to use the proceeds to pay down debt and, combined with the $200 million gross proceeds raised through the recent underwritten pro rata accelerated renounceable entitlement offer, this transaction will further strengthen TEN’s balance sheet and provide additional refinancing flexibility ahead of the upcoming maturity of the Company’s USD125 million (swapped into AUD210 million) USPP Facility due in March 2013.

The transaction is subject to agreed completion conditions, including regulatory and third party consents and finalisation of certain ancillary documents.