Just days after the ACCC gave the Bauer Media and Pacific Magazine sale the green light, it appears Bauer may be seeking to lower the agreed-upon purchase price by half.
Originally, Seven agreed to sell its publishing arm Pacific Magazines to Bauer for $40 million. However, as first reported in the SMH, sources close to the deal said Bauer may attempt to lower the price or delay payment installments due to the impact of coronavirus on the market.
The deal was approved by the ACCC last Thursday, yet on the morning of the verdict, Bauer cancelled its scheduled media interviews and has yet to provide any new commentary or confirmation on sale.
According to the SMH, lawyers for both companies will meet Monday to finalise the deal. A senior source at Bauer told the SMH the company now valued Pac Mags at half the original sale price due to the advertising slump caused by the coronavirus pandemic.
Last week following the ACCC’s verdict, Seven CEO James Warburton said: “We welcome today’s regulatory approval of the sale of Pacific Magazines to Bauer Media. This transaction provides $40 million in cash consideration (pre-adjustments and leave provisions).
“Additionally, the $6.6 million of advertising we are receiving from Bauer over three years further enhances the value of the sale, allowing the titles to continue to reach the valuable audiences SWM commands.
It is understood the sale would help lower the media company’s $541 million debt. It is an especially important deal for Seven following the postponement of the Olympics and AFL, two big drawing cards for the network.
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