Quickflix plays down Netflix report

UPDATE 2.25pm: Quickflix has moved to hose down reports that it is in talks with US movie streaming giant Netflix as a potential investor.

The Australian newspaper reported this morning that Netflix was "running the ruler" over its smaller Australian counterpart.

Quickflix said in a statement this morning that it maintained a regular dialogue with both local and international participants in the entertainment content delivery industry.

However it said it was not aware of any information concerning it that would require disclosure.

Netflix has more than 50 million subscribers worldwide, most of whom are in the US.

Rumours suggest the company is eyeing a launch of its streaming movie and television program service in Australia.

The report follows confirmation this week that the Nine Network had struck a deal with US entertainment giant Home Box Office to pick up preference shares with a potential 12-fold payback.

The move ends HBO's two-year, $10 million investment in Quickflix.

Nine is understood to regard the acquisition an opportunistic financial investment with an attractive risk-reward profile.

Under the terms of the redeemable convertible preference shares issued to HBO in early 2012, Quickflix would have to pay back the holder 12¢ a share in the event of a takeover.

Under that scenario, Nine would reap a profit of about $10 million.

Nine is believed to have paid nearly $1 million for the shares, or about 1¢ each. They can be converted to an 8 per cent stake.

Shares in Quickflix closed up 0.3 cents, or 23.08 per cent, at 1.6 cents.

The West Australian

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