Media baron scions' joint venture crumbles

A joint venture led by two next generation members of Australia's most powerful families has ended after only two months. Lachlan Murdoch, son of News Corp chief Rupert, has written to Consolidated Media Holdings stating that the deal he was pursuing with CMH executive deputy chairman James Packer (pictured) to purchase the firm is off.

The letter from Murdoch stated that they are "not in a position to proceed with the Indicative Proposal due to material changes in the overall transaction terms. Accordingly, the Indicative Proposal has been withdrawn."

Reports from Australia suggest that Packer's stance was the main reason why the deal has been pulled. Speculation has centred around his unwillingness to negotiate on price, with Packer believed to have stated that the initial proposal was final.

The Indicative Proposal, a 50/50 joint venture to acquire 100% of the firm for $4.06 per share in cash, was launched in January (click here to read more).

The failure of the bid follows news last month that Murdoch and Packer's financial backers, SPO Partners & Co, withdrew its equity commitment as a result of the global credit crunch. This left the pair seeking to replace that commitment from within their existing investor group and third parties.