Seven West Media’s $132m acquisition of regional television broadcaster Prime Media Group now throws the spotlight on Bruce Gordon’s WIN Television.
Prime secured a deal equating to 36c a share with Seven West at the weekend that was a 57 per cent premium to its October 29 share price.
Some see this as a move that places a floor price on the value of the WIN regional television network owned by Mr Gordon.
Speculation has existed for some time that an acquisition of WIN by Nine Entertainment makes sense, with an affiliation arrangement for broadcasting content in place for the pair.
Nine CEO Mike Sneesby may bring WIN in house because a deal would offer simplicity to the free-to-air broadcaster and provides synergies.
Earlier, it was understood that there were discussions involving Nine paying Mr Gordon in Nine scrip to buy WIN, which some suggested could have been worth between $50m and $100m.
Mr Gordon holds a stake of about 15 per cent in Nine.
A sale would probably win him a seat at the boardroom table.
Meanwhile, Antony Catalano’s Australian Community Media, which is also owned by Alex Waislitz, had a 23 per cent blocking stake in Prime.
It grabbed a holding in 2019 to thwart Seven West’s earlier attempts to buy the business and has kept lifting it since.
While it may appear that ACM has blinked first, the company walks away from the transaction with a cool $44m, doubling its money in the $132m buyout.
Taking into account tax benefits, the argument is that the offer is more like 46c a share. Mr Catalano bought into Prime from a price that on average was about 20c a share. Already, Seven West has 43.5 per cent support for its proposal and needs 50 per cent to get a deal done.
Propelling the prospect of a transaction was the prospect of a new affiliation agreement with Southern Cross Media that could be struck when the contract between Seven West and Prime expired in two years.
This would leave Prime, advised by E&P Corporate Advisory, stranded should a Southern Cross deal be reached.
Southern Cross previously had an affiliation deal with Nine.
Earlier, Seven West was said to be casting an eye over Southern Cross’s television assets.
This deal throws into question what the future will be for that listed regional television and radio broadcaster when it comes to corporate activity.
Seven West used Stanton Road Partners for the transaction as its adviser and opted for a share sale structure to provide more certainty.
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