The complicated deal follows a protracted legal wrangle over programming and share contracts with Seven Network national television, controlled by Kerry Stokes, who also co-owns MGM Studios in the U.S. Rupert Murdoch's News Ltd has 15% of Seven.
Seven, which had 2% of Optus Vision, is the big winner in the deal, getting the right to buy 50 million Optus shares at $1 with an entitlement to buy a further 50 million shares at the float price. Optus Vision hopes to float at between $1.60 and $2 a share.
Kerry Packer's Publishing & Broadcasting Ltd, which had 5%, gets an option to buy 30 million shares at $1.20 and an entitlement to buy another 30 million in the float.
American telephone company US West, which had 46.5% of Vision, forgoes its $485m investment but wins the right to buy an unspecified number of shares in the float. US West, whose continuing involvement is critical to Optus' local telephone ambitions, will also get a success fee of up to $80m, linked to how many subscribers sign on by December 2000.
Mayne Nickless, an investment company, will get 30 million shares in Optus Communications at 80 cents each but will pay US West's success fee.
Ziggy Switkowski, Optus Communications chief executive, said Seven, PBL and US West would collectively hold between 5% and 10% of Optus after the float. Both Seven and PBL will retain their shares in MovieVision and SportsVision, two programming vehicles contracted to Optus's TV services.
Copyright April 1997, Crain Communications Inc.