Seven West Media has taken a 14.9 per cent stake in Prime Media Group following this morning’s vote of Prime shareholders on the proposed merger of Seven and Prime.
It follows this morning’s news that Prime’s two major shareholders – Australian Community Media executive chairman Antony Catalano and WIN TV owner Bruce Gordon voted against the media company’s proposed takeover by Seven West Media.
Seven had offered to buy Prime for a reported $64 million as part of new CEO James Warburton’s expansion of the TV business.
However, in a statement to the ASX, Prime said: “Based on the proxies received from Prime shareholders to date, the Prime board considers that the scheme is unlikely to be approved by Prime shareholders by the requisite majorities.”
The ACCC had given the merger the green light, while a report from investor consultancy firm Lonergan, Edwards & Associates described the offer as “reasonable” but described the offer price as “unfair”.
On Monday, Prime Media Group chairman John Hartigan – a vocal supporter of the merger – accused Catalano of attempting to “hijack” the merger.
In a statement released to media today, Seven noted the announcement of Prime that the scheme was not approved by the requisite majorities at the shareholder meeting of Prime held this morning.
In response, Seven and Prime have agreed to terminate the Scheme Implementation Deed.
Seven has agreed to acquire 54,594,367 shares in Prime (representing 14.90% of the issued share capital of Prime) from Spheria Asset Management Pty Ltd (Spheria).
Seven will acquire the Prime Shares from Spheria in exchange for the issue of 30,000,000 new shares in Seven.
Commenting on the shareholder vote and the newly-acquired stake in Prime, Warburton, said: “While we’re disappointed with the outcome of today’s vote, we remain committed to Prime.
“As Prime itself has said, the business is under pressure to meet regional Australia’s needs and today’s outcome is an unfortunate result for them and their shareholders.
“We’ve taken a 14.9 per cent stake in Prime today through the issue of 30 million SWM shares to
provide stability for the business, to support regional Australia and regional news. We look forward to continuing our longstanding relationship with Prime, delivering outstanding content for them in 2020.
“We appreciate the cooperation and support of Prime’s Board and management throughout
this process.”
