Privateers snooping for distressed assets in struggling local media space

Media companies in Australia are among some of the greatest victims of the coronavirus pandemic.

The Australian media industry is said to have become a happy hunting ground for private equity firms hoping to snare a bargain, with Kohlberg Kravis Roberts and buyout fund Silver Lake Partners coming up in conversation.

California-based Silver Lake purchased Ticketek owner TEG from Affinity Equity Partners for $1.3bn last year and is known to have been actively examining distressed opportunities globally in the media and technology space — the sectors in which it specialises — since the onset of COVID-19.

The understanding is that it has been holding active discussions in the local market, although its actual interest could be in securing sports rights locally rather than acquisitions.

 

KKR has a special team to target distressed opportunities in the Asia-Pacific region linked to the coronavirus and is said to be searching for deals.

Last year, it was known to have been circling the outdoor advertising business QMS Media, which was sold to Quadrant Private Equity.

Media companies in Australia are among some of the greatest victims of the coronavirus pandemic, as corporates curb advertising spending to manage costs.

The price of listed groups in the space has slumped, and the thinking is that an opportunity exists for a buyout fund hoping to secure a quality business at a minimal price to cash in when conditions improve in the medium term.

In recent months, Sydney-based private equity firm Mercury Capital paid less than $50m for the Bauer Australia magazine business that now also includes Pacific Magazines, which was sold to the German group by Seven West Media before the Mercury Capital transaction.

This was a fraction of the $500m-odd the Bauer family outlaid to the Packer family’s ACP to buy the business in 2012.

Listed media companies trading at opportunistic prices include Seven West Media, oOh!media, Southern Cross Media Group and Prime Media Group.

Cashed-up radio broadcaster HT&E is also trading at lower than normal levels. A suitor sounding out the business in the past year was deterred by its looming tax liabilities.