Industry rumours of Seven West Media acquiring HT&E have again bubbled to the surface following reports on the Australian Financial Review this morning that Seven chiefs “are sizing up plans for a merger and acquisition”.
HT&E’s assets include ARN, iHEART Radio, Emotive and CODY Out Of Home.
Adding to its appeal, HT&E is reportedly debt-free, unlike Seven that is carrying $250 million of red ink on its books.
It’s understood that Seven West Media’s chairman Kerry Stokes had previously sounded out buying the HT&E business, however, neither party could agree on a price.
In last year’s annual report, Seven listed one of its strategic priorities as “explore M&A opportunities”. That said, Seven said its first priority was to start paying a dividend to shareholders.
Any merger would turn Seven into a billion-dollar company and enable it to better compete with arch-rival Nine who, in recent years, has snapped up Fairfax’s newspapers and the Macquarie Radio business.
Another problem facing any merger could be banks’ reluctance to finance the deal given their reluctance to get involved with traditional media companies.
HT&E chairman and former 10 boss, Hamish McLennan (lead image), admitted to the AFR that there had been “informal chitchat in the past” about a possible merger with the TV giant.
“Let’s see if they bounce the ball,” Mr McLennan said. “With free to air, we continue to assess where audiences are going, the cost of production, the inflation in the costs of sports rights, and counterparty debt levels.
“We think we’re one of the best placed media companies. No debt, best talent, a growing share and strong cash flow.”
Seven’s stock closed on Friday at 47¢ per share.
