Seven West Media has launched a takeover of regional broacaster Prime Media Group with an all share deal.
The combined group creates a premium broadcast, video and news network with potential to reach more than 90% of Australia’s population each month.
Seven West Media also announced the sale to Southern Cross Austereo of the Western Australian regional radio business, Redwave Media, for $28 million.
Under the takeover deal, Prime shareholders will 0.4582 Seven West Media shares for each Prime share they hold .
Existing Seven West shareholders will own 90% of the combined entity, with Prime shareholders the remaining 10%.
The merger is expected to produce annual cost synergies of $11million.
Seven West Media chair Kerry Stokes said: “SWM and Prime have had a longstanding relationship and are key partners in the industry. The combined group will cement our position as Australia’s leading content provider and presents excellent value to shareholders.”
Prime’s chair John Hartigan: “The Prime Board has carefully considered the Proposed Transaction and believes it is in the best interests of Prime shareholders. It represents an exciting opportunity for Prime shareholders to maintain their exposure to the broadcast television industry in a stronger and larger combined group that is more relevant and resilient.”
SWM’s CEO James Warburton said: “The Proposed Transaction is a game changer for advertisers and media buyers and cements SWM’s position as the superior advertising offering. Overnight, SWM will be the leading wholly-owned commercial premium network that amasses a monthly Australian audience reach of 18 million people.”
Seven's reasons for the takeover:
Both Prime and Seven have been hit by a soft advertising market.
Prime in August posted a full year profit of $7.35 million, up 159%. Advertising revenue was down 4.7% to $191.86 million, reflecting the absence of major events and difficult trading conditions in the lead up to, and during, the federal election..
Seven West Media posted a statutory loss of $444.48 million for the year to June as the media group wrote down the value of its television licences. The result compared to a profit of $133.67 million in 2018. This year, excluding significant items of $573.7 million, profit after tax was down almost 8% to $129.29 million.
Seven West shares closed yesterday at $0.38. Prrme last traded at $0.18.
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