Packer on defence after Stokes share raid

In the heavyweight battle for control of Consolidated Media Holdings, James Packer has responded to Kerry Stokes' $234 million hostile share raid in the only way a Packer would - showing he's got the cash to defend his ground.

As Mr Stokes' Seven Network finalised its three-day attack on the remnants of the once-powerful Packer media empire, announcing it had built an 18.3 per cent stake, Mr Packer revealed yesterday he too had opened the cheque book.

While Mr Stokes forked out more than $150 million gobbling up shares on Wednesday, it emerged yesterday that Mr Packer reacted swiftly, buying close to 5.7 million shares in ConsMedia himself.

And when Mr Stokes dived in again on Thursday, increasing his stake further, so did Mr Packer, spending more than $10 million to raise his stake to more than 39 per cent.

The billionaires are now locked in a likely war of attrition over control of ConsMedia's prized investments in the pay TV companies Foxtel and Fox Sports and the jobs site Seek.

While Mr Packer may have retaliated and now has twice the stake of Mr Stokes, he hasn't been able to prevent having been backed into a corner by Seven's aggressive grab.

Mr Stokes has cruelled Mr Packer's chances of controlling a future break-up or privatisation of his media assets. Seven now has a seat at the table, able to stymie attempts to sell Mr Packer's stake to a third party via a scheme of arrangement, should the billionaire decide or need to exit the business to raise money.

Market watchers yesterday took the move as a clear sign James Packer wasn't willing to sell, especially given the long-standing animosity between both camps.

Investors were kept waiting until late yesterday for official confirmation that Seven was behind the huge share raid.

Some said Mr Packer's trades were noteworthy because they were made while the company was in blackout, following the close of its accounts and coming before the release of its full-year earnings next month.

ConsMedia's securities trading policy states that directors must not trade after July 1 until results are released, without the permission of the executive chairman, John Alexander. The company secretary, Louise Arthur, told BusinessDay that all "steps required under its securities trading policy to permit the purchase of shares by CPH were complied with."

Eric Mayne, the chief supervision officer of the stock exchange, recently restated ASX policy that "while such trading might not be prohibited by law, it could be perceived to be against the spirit of good corporate governance".

Sources suggested yesterday that the Packer camp has also been mulling the chances of a last-minute attempt for a privatisation to take ConsMedia's prized pay TV assets out of the fire.

Alex Pollak, an analyst at Macquarie, said it was unlikely Mr Stokes would remain a silent investor with his 18 per cent stake. Seven's "intention is not the stock", he said. Buying more than a blocking stake of 10 per cent, their "intention would be to go further".

Mr Packer's share buys were widely seen as an attempt to refute market speculation he could be a forced seller, having lost half his wealth as the value of his private and listed investments plummeted in the market meltdown and pressure increased on his gaming strategy.

ConsMedia shares closed 1 down at $2.60 yesterday, having rallied 18 per cent over the previous two days as speculation of a bidding war for the company mounted.