Private Equity Firm Mercury Capital Bins Plans To Buy Bauer

Private Equity Firm Mercury Capital Bins Plans To Buy Bauer
Ally Burnie
By Ally Burnie
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Mercury Capital has deserted its plan to buy Bauer Media amidst a stand-off between Bauer, Seven’s Pacific Magazines and the ACCC.

As first reported on The Oz, Mercury’s cold feet follows the ACCC’s concerns over the proposed sale of Pac Mags to Bauer, suggesting the merger would lessen “competitive tension” in the Australian magazine market.

At the time, Seven and Bauer suggested the ACCC’s response was both “disappointing” and that it had taken an “overly narrow view”.

Bauer ANZ CEO Brendon Hill confirmed to The Oz that Mercury abandon its plan to buy the struggling media company, citing that both companies agreed Bauer was the “best place to run the business” moving forward.

It’s unclear whether Mercury’s decision to pull out of the sale is a result of the ACCC’s concerns over the merger of Bauer and Pac Mags.

Hill did suggest, however, that Bauer is open to any private equity bid, should the merger be given the go-ahead.

Seven announced its sale of Pacific Magazines to Bauer for a cash consideration of $40 million in October last year. The deal was expected to be completed by the end of 2019 before it was stymied by the ACC.

According to Seven’s annual report, Pac Magazines generated revenue of just shy of $130 million for the financial year, down 7.2 per cent from $139.5 million the previous year.

The proceeds of the sale would have been used to pay down debt, improving SWM’s balance sheet flexibility and simplifying the organisation to focus on its content led growth strategy.

As part of the deal, SWM would have received $6.6 million of advertising on Bauer Media assets over three years.

It’s unknown where the proposed merger currently stands, with the ACCC still in the midst of consultations on the proposed sale.

 

 

 

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