Prime Media shares hit four-year high on Seven West takeover offer

Prime Media shares hit four-year high on Seven West takeover offer

Seven West Media (ASX: SWM) managing director and chief executive officer James Warburton.

Seven West Media (ASX: SWM) is having a second bite at the cherry as it tries to acquire regional broadcaster Prime Media (ASX: PRT) following its failed $65 million bid in 2019, sending the target's shares up by almost 70 per cent this morning to hit four-year highs.

Today's offer values Prime - which runs numerous Seven-branded stations - at $131.9 million, more than doubling the previous offer that was thwarted by a shareholder vote against the deal when dissent came from major shareholders Bruce Gordon and Antony Catalano.

Entities affiliated with either Catalano or Gordon hold more stock in Prime now than they did back then, but so too does Seven West which took a 14.9 per cent stake in the company after its tilt flopped.

The Prime board has indicated intentions to unanimously recommend shareholders approve the proposal at a shareholder vote to be held in December, provided no superior proposal comes along and an independent expert makes a favourable determination.

Major shareholders of Prime representing 43.5 per cent of shareholders have indicated their support for the transaction, involving an expected net investment from Seven West worth $72 million following its own expected distributions and cash acquired.

Seven West believes the transaction would be highly earnings accretive both before and after synergies that are worth around $5-10 million annually over a 12-18 month period.

Revenue upside is also expected but has not been quantified.

"This proposal is an important step forward for both companies," says Seven West Media managing director and chief executive officer James Warburton.

"SWM and PRT are great partners and have a long, successful relationship. Together, they will offer the best content for our national audience and unmatchable premium revenue opportunities for our clients.

"The acquisition means SWM will become Australia’s leading commercial premium broadcast, video and news network, with the potential to reach more than 90 per cent of Australia’s population each month.

"The proposed transaction is an exciting and transformative development for advertisers and media buyers. It means we will be able to give advertisers easy and seamless access via a single platform to capital city and regional markets."

The acquisition will be facilitated by $600 million Syndicated Facility Agreement underwritten by ANZ (ASX: ANZ).

The announcement comes hot on the heels of the resignation of Prime chairman Ian McGill, who has been replaced by non-executive director Cass O’Connor.

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

From pandemic side hustle to multi-million dollar business: Meet Ling Fung
Partner Content
Ask any parent, and they’ll tell you: preparing for a new baby is no easy task.&n...
Metro Baby
Advertisement

Related Stories

After October lull and a record Black Friday-Cyber Monday weekend, what's next for retail?

After October lull and a record Black Friday-Cyber Monday weekend, what's next for retail?

Just as the Australian Bureau of Statistics (ABS) announced month-o...

Super funds add an extra $30m to Morse Micro Series B

Super funds add an extra $30m to Morse Micro Series B

Sydney-based Morse Micro has tacked on an additional $30 million to...

Health tech VALD raises $37.5m as Canada’s Vistara Growth backs push into North America

Health tech VALD raises $37.5m as Canada’s Vistara Growth backs push into North America

Brisbane-based health tech company VALD has raised US$25 million ($...

APRA intensifies scrutiny of Medibank after major cyberattack

APRA intensifies scrutiny of Medibank after major cyberattack

The Australian Prudential Regulation Authority (APRA) has intensifi...