Antony Catalano and Alex Waislitz link to Prime Media Seven West blocking stake

Media boss Antony Catalano has an eye to becoming a major player in the nation’s regional broadcasting market.

Media boss Antony Catalano held merger talks with regional television network Prime Media in recent months, with an eye to becoming a major player in the nation’s regional broadcasting market.

The comments by the former Fairfax Media and Domain executive came as Mr Catalano emerged with a blocking state in Prime Media just weeks after the regional broadcaster agreed to push ahead on a friendly merger with Seven West Media.

Mr Catalano’s blocking stake alongside billionaire investor Alex Waislitz which will see the pair get a seat at the negotiation table with Kerry Stokes-backed Seven and Prime comes as Australia’s competition regulator on Wednesday formally launched an inquiry into Seven’s $64 million takeover of Prime.

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Mr Catalano and Mr Waislitz who bought Fairfax Media’s regional operations earlier this year, said Seven’s acquisition of Prime will harm regional media.

“I don’t think this deal by Seven achieves the best outcome for regional media, there are broader discussions that could be had that would produce a better regional media company and therefore better serve regional Australians,” Mr Catalano told The Australian.

“Given what needs to happen in regional Australia, there’s an opportunity for a broader consolidation play, not simply allowing a metro company to buy a regional business.

“The best interests of regional Australians are served by having a very strong, robust, healthy regional media business, and the only way that’s going to be achieved is by regional media companies consolidating,” he said.

The pair are keen for their regional newspaper business ACM, which consists of newspaper mastheads, including The Canberra Times and The Newcastle Herald and Ballarat Courier to work together with Prime.

Prime – which is a long time affiliate of broadcaster Seven has a reach of more than five million across regional NSW, Victoria, the ACT, Western Australia and Queensland’s Gold Coast.

A Seven spokesman Wednesday said the acquisition remains attractive.

“Our deal is highly attractive to all shareholders who can share in the upside and strength of a combined Seven West Media and Prime Media.”

Mr Catalano said he and Mr Waislitz started buying shares in Prime from “the moment we entered the regional Australian media market”. The pair announced their acquisition of ACM from Nine in April and wrapped up the deal two months later. A shareholding under 5 per cent doesn’t need to be publicly disclosed to the ASX.

“We’ve had numerous discussions with them, we’ve looked at their business, we’ve studied it and there was an opportunity to bring the businesses together in some shape or form. We still have that interest,” Mr Catalano said.

The shareholding in Prime “should be a signal to everyone that we are serious about investing in regional media”, he said.

The pair have form in being agitators after threatening to mount a rival bid to Nine’s $4 billion merger with Fairfax Media last year.

Through an entity called WA Chess Investments, the two have built up a 10.26 per cent stake in Prime, emerging as the second biggest shareholder in the broadcaster after Spheria Asset Management which holds 14.42 per cent stake. This is enough to prevent a takeover reaching the 90 per cent threshold needed before proceeding to compulsory acquisition.

The WA Chess Investments share vehicle is registered to a company that counts Mr Catalano as a shareholder and a director and Mr Waislitz as a shareholder, documents filed with ASIC show.

WA Chess Investments also counts Mr Waislitz’s investment company Thorney Investments as an associated entity.

Antony Catalano with Alex Waislitz. Picture: Aaron Francis

The ACCC confirmed on Wednesday it look at Seven West’s bid to acquire Prime Media on competition grounds, with a formal decision due on December 18.

This means the proposed Prime shareholder vote to consider the scrip offer will have to come after regulatory clearance is given. Most competition lawyers expect the deal to be cleared.

This month The Australian’s DataRoom column revealed that Mr Catalano had threatened to derail the takeover of Prime Media.

If Seven can pull off its acquisition of Prime, it would be newly installed chief executive James Warburton’s first deal.

Seven has offered 0.4582 of its own stock for each share in Prime, and forecast that the tie-up would deliver $11 million in cost savings.

As well as the Prime offer, which was announced on October 18, Seven is also looking to sell its West Australian regional radio business, RedWave, to Southern Cross Austereo for $28 million.

Prime shares closed 2.5 per cent lower at 20 cents, with Seven up 4 per cent to 40c.