Rupert Murdoch's News Limited made a $2.0 billion takeover offer for rival tycoon James Packer's Consolidated Media Holdings Wednesday while announcing a major company restructure.
News offered Aus$3.50 for each share of the Australian media investment firm, which is focused on subscription television, with the bid subject to several conditions including approval from the competition watchdog.
If successful, News would emerge with 50 percent of Foxtel, the country's biggest pay TV operator, and all of Fox Sports. Telecommunications giant Telstra holds the other half of Foxtel.
The announcement came as News unveiled a major revamp to streamline its Australian operations, merging its print and digital businesses with significant redundancies, without specifying the number.
But chief executive Kim Williams reaffirmed the company's commitment to its newspapers, such as The Australian, saying: "We believe in print and are committed to print."
Like media companies worldwide, Murdoch's Australian arm, which controls 70 percent of the country's newspapers and has a stake in broadcaster Sky News, has been hit by advertisers and readers migrating from print to the Internet.
Its key rival Fairfax announced a major overhaul on Monday, with 1,900 jobs slashed and paywalls erected on the Sydney Morning Herald and The Age.
If the sale goes ahead, it will be the first time in a century that the Packer family will have no media interests in Australia, apart from a small stake in the Ten Network.
In a statement, James Packer welcomed the proposal to take over Consolidated Media Holdings, a firm formed when Publishing and Broadcasting Ltd, founded by his grandfather Frank and run by his father Kerry, changed its name in 2007.
He said it was a fair offer and would recommend it to shareholders.
"CPH welcomes News's proposal and looks forward to Consolidated Media and News working together to address the detailed terms and conditions," said Packer, who owns 50 percent of the firm.
News of the deal helped push CPH's share price almost 10 percent higher to Aus$3.37. News Corp, News Ltd's parent company, added 0.55 percent to Aus$20.15.
Since his father's death, James Packer has moved away from the family's traditional media business and focused on creating a worldwide gaming empire.
As well as Australia, he has casino interests in Macau, and is expected to use the cash from the sale to pursue a full merger of his Crown Casino in Melbourne and Sydney's Star Casino.
For News, the takeover is its most significant investment in pay television since its bid to buy out British Sky Broadcasting broke down.
The company also said it had acquired Australian Independent Business Media, which publishes the successful Business Spectator and the Eureka Report, without revealing the price.
Under the restructuring plans, News will fold its operations in New South Wales, Queensland and Victoria states into five divisions from the present 19, managing all editorial and sales as a single network.
It will also collapse News Digital Media into its general operations.
Chief executive Williams, the former head of Foxtel, said he wanted to centralise editorial content as well as commercial functions.
"This is the only way to drive the company forward and respond sensibly and properly to the rapid change evident in the landscape of media operation and use," he said.