As the Bauer Media and Pac Mags saga continues, it appears the media company’s German owners may be forced to pay Seven West Media the agreed-upon $40 million for its Pacific Magazine titles.
As reported on the AFR, even if the German company decided to close its Australian arm, Seven West Media will still be owed the $40 million for Pacific Magazines due to a financial guarantee given to Bauer locally by its German parent.
According to the AFR, Bauer Media’s parent company, Heinrich Bauer Verlag KG is understood to have guaranteed the Australian company’s Pac Mags purchase.
Bauer’s local accounts are believed to be guaranteed by its German parents, meaning it will provide financial support to the company if it is unable to fulfill the obligations itself.
“The ability of the group to continue as a going concern is dependent upon ongoing financial support and funding from the ultimate parent, Heinrich Bauer Verlag KG,” state Bauer’s Australian accounts.
“The parent has confirmed in writing that it will provide financial support to the level required to the group to allow it to fulfil all obligations as and when they fall due for a period of no less than 12 months from the date of approval of these financial statements.”
Just yesterday it was revealed Bauer Australia and Seven West Media will head to court over the issue in an effort to ensure the deal goes ahead at the agreed price. The case is due before the NSW Supreme Court on 26 April.
SWM told the ASX on Wednesday: “The Bauer transaction is being pursued to completion. The contract is unconditional following the ACCC’s clearance. Seven instituted Court proceedings in the NSW Supreme Court yesterday to compel completion.
“Seven has received an email from Bauer’s solicitors saying ‘Bauer is aware of its obligations under the Sale of Business Agreement and, as you know, has been actively engaged since October 2019 in preparing for completion’.”
There have been questions over whether or not the deal will actually go ahead since the ACCC approved it, with Bauer reportedly now angling for a lower price.
Bauer Media ANZ CEO Brendon Hill has not responded to B&T’s requests for comment and has refused to comment to other media publications.
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