As expected shares in Consolidated Media Holdings fell sharply this morning after relisting in the wake of Lachlan Murdoch’s failed bid. The shares fell 60 cents to a low of $3.47 before recovering to be around 11% lower at $3.60 at 10.30am.

When Lachlan’s first attempt to takeover ConsMedia was announced on January 21, it was an “exclusive” on the News Ltd website. But yesterday, no exclusive and Lachlan wasn’t available for comment.

The Australian reported it but we’re none the wiser from the heart of Murdochdom. Dad didn’t want Lachlan to become involved, News Ltd CEO John Hartigan was a bemused observer and now the speculation starts.

The Daily Telegraph has Lachlan plotting more moves. Some reckon APN News And Media could be on the list, others say another tilt at ConsMedia later in the year, perhaps another look at Austar, or even white knight to the WAN board. Lachlan’s problem is that he has to go cap in hand to the private equity funds to get enough firepower to compete.

ConsMedia is now on the market, but James Packer currently wants $4.80 a share, so no one will deal because ConsMedia isn’t worth that. Lachlan’s most recent backers, Providence Partners, wanted to pay less than $4 ($3.96 was suggested).

ConsMedia’s problem is that it has no asset capable of supporting large borrowings. The 50% of Premier Media/Fox Sports can only finance $750 million or so of debt (the amount the ANZ and other banks were prepared to advance). The 27% of Seek and 25% of Foxtel merely collect dividends.

The fact that Packer is now seen as a seller will depress the ConsMedia share price in the absence of any deal. Expect to see rumours of possible renewed interest from Lachlan and others simply to keep the ConsMedia share price higher than it should be.

ConsMedia is a high priced collection of hope, valued at future levels because of the value analysts see in the new technologies of Pay TV and the internet. The 25% stake ConsMedia owns in PBL Media (with the Nine Network and ACP Magazines) has no real value because of heavy debts and the emerging fact that its fate isn’t in the hands of its owners, CVC, but James Packer.

Packer can’t sell the stake until September 2009. If he sells before then, billions of dollars in debt become payable, meaning catastrophe for CVC in the current credit crunch climate.

Analysts say that if the decline in corporate bonds is applied to CVC’s debt, there’s been a 10% to 15% drop in value of PBL Media. US corporate bonds issued in leveraged buyouts are being traded for 85c to 90c in the dollar in the US as investment banks sell them off or “internalise” them into new funds.

James Packer wants $500 million for the 25% of PBL Media, which is equal to what CVC paid for the second tranche it bought last year (after the initial purchase of 50%). But the market is signalling that’s too high and somewhere around $400 million might be more accurate (no control premium).

Finally, there’s talk Telstra could be interested in ConsMedia. It has already had a look but didn’t pursue it. Telstra feels it could have problems with the ACCC and there’s a lingering suggestion that its 50% of Foxtel might have to be sold to get the competition regulator to approve its ambitious broadband plans.

News Ltd, which owns 25% of Foxtel and the other 50% of Premier Media/Fox Sports, wouldn’t allow Telstra to control the Pay TV businesses. Nor would the ACCC with Telstra’s broadband ambitions.

News deflected an attempt by CVC to include the Foxtel and Premier Media stakes in its PBL Media buy; News approved the split of PBL into ConsMedia and the gaming business, and it approved the Lachlan Murdoch bid.

News’ control remains the obstacle to any deal. Perhaps CVC might come again, buying the remaining 25% of PBL Media and ConsMedia and doing a deal with News to sell its stake in Foxtel back to the Murdoch empire.