Seven West Media and Prime merger under scrutiny

ACCC review along with Anthony Catalano's recent investment into Prime raise hurdles for the latest Australian media deal

ASX-listed Seven West Media's (Seven) proposed $64 million takeover of Prime Media is under scrutiny. 

Seven announced its plans last month to merge with Prime by acquiring all its issued shares, in order to become what it claimed would be the leading wholly-owned commercial premium broadcast, video and news network across Australia, reaching over 18 million people each month. It is also planning on divesting itself of its Western Australian radio assets to Southern Cross Media for $28 million. 

The merger looks set to reduce media competition even further, following the massive merger between Nine and Fairfax last year

Seven managing director and 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,” he said.

The proposal included a scheme under which Prime shareholders received 0.4582 Seven shares for each Prime share they hold, with exiting Seven shareholders owning 90 per cent of the merged entity and Prime shareholders owner the remainder. 

The media merger is now under the scrutiny of the Australian Competition and Consumer Commission (ACCC), which is inviting industry submissions until 19 November 2019. If the ACCC and shareholders approve, it is expected the merger will occur in early 2020.

However, outspoken media boss and executive chairman of regional newspaper group, Australian Community Media, Anthony Catalano, has since increased his investment in Prime Media this week to more than 10 per cent, a move that has the potential to derail the merger or see Catalano with a seat at Seven’s table. Currently, 50 per cent of Prime shareholders have to approve the merger for it to proceed. 

The news follows Seven’s net loss of $444.4 million in full-year to 30 June 2019.

The ASX-listed media giant published its full-year results in August, confirming $1.56 billion in revenue, a 4 per cent dip year-on-year, along with a $129.3 million underlying group net profit, a decrease of 7.9 per cent on 2018.

However, it was the final net loss of $444.4m that grabbed the headlines, a figure resulting from $573.7 million in impairment charge relating to licences, mastheads, goodwill and other intangible write-offs. Seven West Media (SWM) attributed these to softer advertising market conditions across its TV and newspaper mastheads.

Hardest hit across the divisions was publishing, which reported an 8.3 per cent decline in full-year revenue to $315.2 million, as well as a 25 per cent fall in EBIT to $23m. SWM also reported a one-off $16.8m net loss on the Yahoo7 sale, as well as $22.2m in redundancy costs.

Warburton said at the time he was keen to pursue merger and acquisition opportunities in traditional media and non-traditional areas.

The comments came after a big M&A year for Seven’s rival, Nine, which purchased the Fairfax Media Group and is now looking to secure the remaining portion of Macquarie Media it doesn’t currently own.

Seven West Media recently appointed its first-ever chief marketing officer (CMO), Charlotte Valente, in a move to becoming more audience-centric.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.  

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

More Videos

Thanks for sharing with us. I just loved your way of presentation. I enjoyed reading this .Thanks for sharing and keep writing. It is goo...

Nisha

Cancer Council: Finding the physical-virtual engagement balance post-COVID

Read more

yes AI should be a course so many People Use AI https://g-techsolutions.com...

M Abdullah Khan

Is AI on course to take over human creativity? - Modern creative - CMO Australia

Read more

Extremely informative. One should definitely go through the blog in order to know different aspects of the top retail technology.

Pooja Gupta

Donut King takes in-store marketing to the next digital level

Read more

this is very benefit for us we can through all the thing in this and its very benefit for city personhttps://g-techsolutions.com...

M Abdullah Khan

What does the Oculus Rift launch mean for marketers?

Read more

as we all known AI is very spread and alot of companies used ai and we take alot of work from AI https://g-techsolutions.com...

M Abdullah Khan

Making sense artificial intelligence - Food for thought - CMO Australia

Read more

Blog Posts

Brand storytelling lessons from Singapore’s iconic Fullerton hotel

In early 2020, I had the pleasure of staying at the newly opened Fullerton Hotel in Sydney. It was on this trip I first became aware of the Fullerton’s commitment to brand storytelling.

Gabrielle Dolan

Business storytelling leader

You’re doing it wrong: Emotion doesn’t mean emotional

If you’ve been around advertising long enough, you’ve probably seen (or written) a slide which says: “They won’t remember what you say, they’ll remember how you made them feel.” But it’s wrong. Our understanding of how emotion is used in advertising has been ill informed and poorly applied.

Zac Martin

Senior planner, Ogilvy Melbourne

Why does brand execution often kill creativity?

The launch of a new brand, or indeed a rebrand, is a transformation to be greeted with fanfare. So why is it that once the brand has launched, the brand execution phase can also be the moment at which you kill its creativity?

Rich Curtis

CEO, FutureBrand A/NZ

Sign in