Kerry Packer by Michael Stahl (i read books .txt) 📕

People, and perhaps ironically, Cosmopolitan; the magazine that had been the catalyst for Kerry’s own initial magazine foray, Cleo. After the purchase, ACP held 50 per cent of the magazine market in Australia.

He also scored a significant win in acquiring 48 per cent of the distressed engineering conglomerate Australian National Industries in 1989. American corporate headkicker Al ‘Chainsaw’ Dunlap was installed and, when the sawdust settled just two and a half years later, Packer sold his share of ANI at a profit of $200 million.

He often seemed to have the punter’s luck. Through 1987, Packer steadily built up a stake of around 12 per cent in the UK merchant bank, Hill Samuel. But by mid-year, he was becoming jittery about the world economy. Packer’s lieutenant Trevor Kennedy went to London to offload the shares, eventually doing a deal that netted an $80 million profit.

That was in early October. Two weeks later, the share market crashed.

An even more audacious and slightly more profitable move on a bank occurred in 1992, when Packer acquired almost 10 per cent of Westpac for around $500 million. It was believed to be an advance action on a full-scale takeover, but Packer bailed out six months later—still bagging $100 million profit.

Author Paul Barry, in The Rise and Rise of Kerry Packer, reported that Packer’s friendship with British financier Jimmy Goldsmith opened the door to a variety of international deals. In this rarefied atmosphere, it seemed, even to attempt takeovers and fail—as Goldsmith, Packer and co would do with Goodyear, British American Tobacco and others—would reap seven-figure profits.

Packer didn’t always have the Midas touch or psychic signals. The debit side of his ledger included unsuccessful tilts on property deals, international takeovers, pay television investments, goldmines and a near-obsession with foreign exchange trading. The latter was said to have lost him half a billion dollars in 1993.

The biggest and best of Packer’s deals was, of course, the selling of his beloved Nine Network to Alan Bond. It’s the stuff of business legend that in January 1987, after the relaxation of national media ownership laws, acquisitive Perth signwriter Alan Bond came a-calling to revive an earlier discussion about selling his two Channel Nine stations in Perth and Brisbane.

Bond estimated his two stations were worth $400 million. Packer’s eyebrows jumped. He mused on the likely value of his two Nines, in the far larger markets of Sydney and Melbourne.

Bond later claimed that Packer had thumped the table and declared them worth $1 billion, non-negotiable. But according to financial journalist Trevor Sykes, who has his say on the machinations of the deal in the excerpts below, it was Bond who ventured: ‘Oh, they must be worth a billion dollars!’

Packer knew only too well that his own advisers had valued his Sydney and Melbourne stations at $400 million.

With only Packer and Bond in the room—in Sydney’s Intercontinental Hotel—one’s thoughts drift to Packer’s Park St office, and the painting of the lion and the gazelle, er, negotiating. Bond ended up paying $1.055 billion.

‘Everyone thought [Packer] was wedded to TV forever,’ says Sykes. ‘But he’d made a billion dollars. I couldn’t think of anything I wouldn’t sell for a billion dollars … And when you look at the way it was structured, Kerry always knew Bondy had just borrowed the stations.’

Packer, famously, made a photocopy of the cheque and had it hung on the back of the toilet door in his Park Street office.

Packer’s foresight, or perhaps simply his reading of Bond’s business abilities, left him in the front-row seat with $200 million worth of preference shares, to be paid off in three years’ time. Should Bond be unable to pay them out, the show would be over and Packer would swoop back into control.

And so it came to pass.

Indeed, KP’s impressive figure for selling a television network in Australia would—and perhaps could—only be surpassed by his son, James. In September 2007, less than two years after his father’s death, James sold the Nine Network to venture capital firm CVC Partners for a total of $5.3 billion (comprising $1.9 billion in cash and $3.4 billion of debt).

Within a matter of weeks, the US would reel from the collapse of sub-prime mortgages and plunge most of the world into at least two years of financial crisis.

Kerry Packer was a dealer to the end. In mid-December 2005 he flew from Argentina, where he watched his Ellerstina team play in the Argentine Polo Open (the three-time champions lost, on this occasion), to formally bid $780 million for the rights to televise the Aussie Rules football from 2007–11. The offer was accepted on 23 December.

Within a fortnight, the rival consortium of Seven/Ten was forced to step up and beat Packer’s bid. But by that time Packer, in the most final sense, had had the last word.

5

PACKER UNDER FIRE

It became more than that for Kerry Packer when, in 1984, the Fairfax National Times newspaper published documents leaked from the royal commission, headed by Frank Costigan QC, on the notorious (and thankfully now defunct) Federated Ship Painters and Dockers Union.

The National Times story revealed the existence of a Mr Big, supposedly with interests in underworld activities.

Packer had given evidence the previous year about a cash loan, to do with a film-financing scheme, that linked him to some shady Queensland businessmen. Packer had received the $225,000 in cash, for reasons he explained bluntly: ‘Because I like cash. I have a squirrel mentality. I like to keep cash. It is by no means the most cash I have ever had in my life.’

His codename in commission documents, Squirrel, was changed by the National Times, but Sydney was soon abuzz with gossip (even inner-city graffiti) that the ‘Goanna’ was Packer.

With legal lieutenant Malcolm Turnbull, Packer decided to go on the offensive. He identified himself as the central character and, in the 8000-word document that followed, proceeded to dismantle the allegations and innuendo that had