As the market talks about the need for a $500 million capital raising venture for Seven West Media, analysts have suggested this could be an opportune moment for Kerry Stokes to increase his holding.
The market has been buzzing with chatter about the need for the media owner to raise capital to alleviate debt in a weak advertising market.
The company's shares have been declining rapidly since late April. Overnight, the share price dropped 6.19%.
Analysts have explored what a capital raising exercise might mean for Kerry Stokes and Seven Group Holdings.
Pulse Markets managing director Hamish McCathie told AdNews: “You've got to be careful, because Stokes could underwrite the whole raising at a lower price, which would be negative for the stock price.
“He would gain a bigger stake at a lower price. It would be lower than if it went to the institutions or the funds.”
Cox Media principal Peter Cox said: “If Seven Group Holdings takes its full entitlement, which it probably will, and if some other shareholders do not, then obviously its shareholding increases.
“It will be getting this at a cheaper price than when it bought the shares, because the price is lower.
“These are dangerous times for Seven, The ratings have been strong, but not the financial results. It would be embarrassing for the company.”
Meanwhile, another media analyst, who preferred to remain unnamed, said: “There could be a commercial imperative from Seven Group Holdings to gain extra equity at a cheaper price.”
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