News Corp offers $2 bn for Australian media assets

Rupert Murdoch's News Corp made a $2 billion takeover offer for Australia's Consolidated Media Holdings on Wednesday, boosting top shareholder and billionaire James Packer's warchest as he abandons media in favour of casinos.

Packer, who has built stakes in casinos in Australia, London, Macau and Las Vegas, indicated he would accept the offer in the absence of a higher bid for the pay-TV stakeholder, in which he holds 50.1 percent.

For News, a successful bid would double its stake in Australia's dominant pay TV business Foxtel to 50 percent, and give it 100 percent of content provider Fox Sports.

The offer of A$3.50 a share was pitched at a 14 percent premium to Consolidated Media's last closing price of A$3.08.

Packer recently took a 10 percent stake in Echo Entertainment , owner of Sydney's Star casino, through his Crown Ltd amid speculation he wants to use Echo's licence to build a new casino complex in Sydney to attract more Asian high-rollers.

"It frees up more cash and gives him a bit more flexibility," said Paul Xiradis, managing director of Ausbil Dexia, which owns stakes in News Corp and Echo.

"He's shown his hand in Echo ... but his intentions are not well and truly understood," he said.

This week, Genting Group upped its stake in Echo Entertainment to almost 10 percent, sources with knowledge of the matter said, putting the Malaysian gaming operator on par with Packer.

News Ltd , publisher of some of the country's leading newspapers, is expected soon to announce costs cuts and job losses as the industry's old guard tries to transform in the face of declining ad sales and a move online.

"It makes sense for them to acquire Consolidated Media and the price seems reasonable," Xiradis said.

Rival Fairfax Media said earlier this week it would cut 1,900 jobs over three years.

Packer is renowned for his perfectly timed sale of the Nine Network TV in 2006 for A$4.5 billion, one of the last big acquisitions by private equity before the financial crisis struck. The owners of Nine are now struggling to refinance their debt.

Seven Group Holdings , controlled by Australian billionaire Kerry Stokes, also has a 24 percent stake in Consolidated Media, according to Thomson Reuters data.

Seven Group shares were up 2.9 percent at A$8.12 by 0055 GMT.