Seven West Media has launched a $131.9 million takeover of regional television broadcaster Prime Media.
The national network owner announced that it has entered into a conditional Share Sale Agreement to acquire all the business and related assets of Prime Media Group .
The acquisition -- with the board of Prime indicating it intends to unanimously recommend the bid -- is subject to a vote of the Prime shareholders to be held in December.
Major shareholders of Prime representing 43.5% of the company have indicated their support, says Seven West.
Antony Catalano's Australian Community Media (ACM) in September upped its holding in Prime to almost 23% from just under 20%.
The bid price is 36 cents a share, made up of a 10 cent capital return and a 26 cent fully franked dividend. Prime shares closed on Friday at 23 cents.
Seven West says a combined business will create a leading wholly-owned commercial premium broadcast, video and news network across Australia, reaching more than 90% of the Australian population.
CEO James Warburton: “This proposal is an important step forward for both companies. 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% 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."
Prime chair Cass O'Connor to shareholders: “Your board has long recognised the need to address the structural issues affecting regional broadcast media through matters within its control. This Proposal from Seven has been warmly received by your Board. Should it complete, the benefits for our shareholders, our regional audiences and our regional and national advertisers are meaningful.
"On behalf of our shareholders, employees, audiences and advertisers, I thank SWM’s Chairman Mr Kerry Stokes and CEO Mr James Warburton for this proposal and the careful consideration which has preceded it. My personal thanks extend to Prime CEO Ian Audsley, CFO John Palisi and recent Chairman Ian McGill for their tireless work. This is a terrific outcome from your efforts, gentlemen.”
Prime CEO Ian Audsley: “The Asset Sale removes a number of the near and longer term headwinds facing Prime and crystallises certain cash value. Importantly, the Asset Sale price has regard to the strategic nature of Prime’s asset base, with the purchase price currently expected to allow a distribution to Prime shareholders of 36 cents per share, which is a material premium to recent trading prices. On Completion of the Asset Sale, Prime’s key assets, businesses and employees will be transferred to Seven ownership, which will ensure strong continuity of operations and focus on regional Australia.”
In the year to June, Prime posted total revenue $178.7 million, up 9.2%. Statutory profit after tax was $19.6 million, up 195.6%.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.