Interests associated with Antony Catalano, who bought the former Fairfax regional titles, has taken a strategic stake in regional broadcaster Prime Media, now the subject of a merger with Seven West Media.
According to a disclosure to the ASX, the holding in Prime represents 10.26% of the shares on issue. A 90% holding is needed to compulsorily acquire the rest of the shares in a company.
The blocking stake was built up through a number of entities including Alex Waislitz's Thorney Investment Group. Waislitz and Catalano bought Australian Community Media, formerly part of Fairfax before the Nine merger, for $125 million in June.
It's unclear what Catalano, a former head of the Domain online property classified business, will do with the new holding in Prime.
The AFR reports: "It has been speculated Mr Catalano wants to thwart Seven's deal with Prime so he can buy the regional broadcaster. However, the ACM executive chairman has not made a counter-offer to Seven's deal."
The Australian's Margin Call column says Catalano's logic is similar to Nine’s plans with its metro TV stations and newly acquired mastheads.
"They reckon there is a compelling case to tie up ACM’s mastheads with Prime’s newsrooms, which overlap around the country," the newspaper says.
"The Canberra Times would feed into Prime’s Canberra bulletin, The Border Mail would link up with Prime’s Albury-Wodonga bulletin, and on and on across ACM’s 160 regional publications around Australia."
A key player will be billionaire broadcast veteran Bruce Gordon, the owner of WIN Television, who has just under 15% of Prime.
Seven West Media this month launched an all share takeover of the Prime to create a premium broadcast, video and news network with potential to reach more than 90% of Australia’s population.
Under the deal, Prime shareholders will get0.4582 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 acquisition of Prime Media is step one in plans by new Seven West Media CEO James Warburton to transform the network and take on a soft advertising market.
"This is a game-changer transaction for advertisers and media buyers and will put us in a position of a clearly superior advertising offer," he said when announcing the deal.
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