Bauer Media’s rumour mill is running overtime, with reports this morning of a potential merger with Pacific Magazines in order to quash local competition and cut costs.
According to The Australian, Bauer has approached Seven West Media with regards to buying out Pacific’s division, with The Oz claiming an unsolicited approach was made in recent months, despite talks between Bauer and Seven not progressing any further as of yet.
Sources are apparently reporting that only a handful of Pacific’s titles were profitable, meaning a merger would result in a major cost collaboration, while the new print behemoth would boast a stronger audience spread for advertisers.
Both Pacific and Bauer declined to comment on the speculation.
Per The Oz, this is not the first time talks have come up between the two companies, but that the pricing of synergies held them back from advancing in discussions. Pacific has also recently heavily invested in its digital front, so Seven would presumably want any acquisition price tag to reflect this asset.
The move would merge a number of successful publications from both companies, including Australian Women’s Weekly and Woman’s Day from Bauer, as well as the likes of New Idea and Better Homes and Gardens from Pacific.
Former CEO Pete Zavecz made the move this year to take back digital ownership from Yahoo to reclaim more control over its online editorial and commercial arms, leading it to reach a unique digital audiences of two million after 13 consecutive quarters of overall audience growth.
Pacific Magazines recently appointed new CEO Gereurd Roberts after the sudden departure of Zavecz in August. Bauer’s chief Nick Chan is, however, very familiar with Seven’s publishing arm, having been at the helm for 10 years until being promoted to Seven’s chief operating office in 2013.
Bauer has lost a few titles in recent times, including infamous Cleo in January, Women’s Fitness, Zoo Weekly, Madison and Grazia. Meanwhile Pacific has been enduring a rocky period of its own, cutting and selling titles of Prevention, Your Garden, K-Zone, Total Girl, while switching to pure digital on names like Practical Parenting and Bride to Be.
Bauer also recently underwent a streamline of operations and executive shuffle, with reports of additional titles closing. The year to June 30 2016 saw Pacific’s earnings before interest and tax dropped over 50 per cent to $9 million, while revenue dropped by 8.6 per cent to $201 million.
Per The Oz, industry sources believe Bauer needs to make this acquisition if it wants to maintain its place in this market as both advertising dollars and circulation figures dip.
