Embattled media organisation Seven West Media went into a trading halt on the ASX this morning.
It then released a statement via the ASX where it said:
“The article in the AFR is not correct regarding a prospective sale of West Australian Newspapers. The figures referenced in the article but misattributed are in accordance with SWM’s pre-corona virus forecasts. SWM has since withdrawn guidance for the group by way of ASX announcement on 24 March 2020.
The Bauer transaction is being pursued to completion. The contract is unconditional following the ACCC’s clearance. Seven instituted Court proceedings in the NSW Supreme Court yesterday to compel completion.”
SWM shares were trading at $0.064 in late trade on Wednesday. Its shares have since plummeted from a 2007 high of $15.
The company now only has a market value of less than $100 million to support debt of $859 million and, many media analysts agree, it is now ripe for a takeover.
There had long been industry rumours that News Corp was eyeing the business. However, it denied that was the case on Monday (read B&T’s reporting here.) That said, where there’s smoke there’s often fire.
Rumours also persist that Seven West Media chairman Kerry Stokes no longer wants to prop-up the business and is keen to sell for the right price. The billionaire more interested in his highly lucrative mining operations in Western Australia than media operations on the eastern seaboard.
Recently appointed SWM CEO James Warburton also has a reputation for fattening businesses for sale.
Last Thursday, Warburton announced 20 per cent pay cuts at SWM and said job losses were “inevitable”.
The problem for the television side of the business has been exacerbated by the loss of the network’s biggest cash cow, its AFL coverage, and the postponement of the Tokyo Olympics to 2021.