Lachlan Murdoch has failed at his first attempt to become a media proprietor in his own right after withdrawing a A$3.3 billion (£1.5 billion) offer to privatise Australia’s second biggest media company.

The proposed deal, to take over the media investment company Consolidated Media Holdings (CMH) with James Packer, collapsed after the partners failed to agree on terms.

Rupert Murdoch’s elder son had planned to take over the media investment company alongside CMH’s major shareholder, the Packer family’s Consolidated Press Holdings.

But Mr Packer reportedly changed his mind about forming a 50-50 joint venture, instead seeking to sell down his 38 per cent stake in CMH to 25 per cent, forcing Mr Murdoch to try to persuade his financiers to take a bigger stake.

The deal was in jeopardy last month when SPO Partners, an investment group backing Mr Murdoch, pulled out of its funding commitment.

He is thought to have since found a new sponsor in Providence Equity Partners, the US buy-out group, and he indicated in a statement today that the decision to withdraw was not due to difficulty in arranging funding in current markets.

Instead, he could not proceed “due to material changes in the overall transaction terms”.

CMH's assets include a 25 per cent stake in PBL Media, a private equity vehicle that owns the Nine television network and a string of magazines. It also owns a quarter of Foxtel, the pay-TV company, and half of a pay-TV sports broadcaster.

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