Austar shares spike on takeover talks

SYDNEY March 2 - Pay television operator Austar United Communications says its majority owner has had talks with Foxtel over a possible takeover bid for the smaller company, sending its shares more than 10 per cent higher.
Austar said on Wednesday its 54 per cent owner, Liberty Global Inc, had held "verbal discussions" with Foxtel, but no proposal had been received relating to a bid.
Shares in Austar climbed 12 cents, or 10.62 per cent, to $1.25 after earlier rising as high as $1.46 in intraday trade as almost 50 million shares changed hands.
Austar made the comments in response to reports in Fairfax media that Foxtel would bid for the company, backed by the boards of its joint owners, Telstra Corporation and Consolidated Media Holdings.
The report said US-based Liberty Global had indicated it would be open to a bid.
Austar has a market capitalisation of $1.5 billion.
Referring to the Fairfax report of the possible bid by Foxtel, Austar said "it has received no proposal of this kind".
"Austar understands that verbal discussions have taken place between Foxtel and Liberty in relation to a possible acquisition of Austar," the company said.
"No assurance can be given that those discussions will lead to a proposal being put to Austar or its shareholders."
Austar last month reported full year profit growth of 69.5 per cent after recording an increase in the average number of television subscribers, but warned subscriber numbers could go backwards in the first three months of the new year.
Chief executive John Porter said at the time that households still were careful with spending, while new digital channels from free-to-air broadcasters also presented difficulties.
Austar says it will update shareholders on the takeover talks at the appropriate stage should a formal proposal eventuate.