No bid for Fairfax pushes Seven higher

Shares in free-to-air broadcaster Seven West Media rallied after the Stokes family ruled out a counter bid for Fairfax Media.

Shares in free-to-air broadcaster Seven West Media rallied after the Stokes family ruled out a counter bid for Fairfax Media, reducing the possibility of a bidding war with Nine for the 177-year old publisher.

Seven West’s share price hit a four-day high today, finishing the session up 4.17 per cent to 88c, as the wider sharemarket closed down 0.55 per cent.

This means Seven West has nearly doubled in value since mid-February to give the top-rated commercial network a market value of $1.32 billion.

News of Nine’s $2.1bn cash-and-stock takeover of Fairfax on July 26 sent shares in Seven tumbling over a four-day period down to 82.5c.

The stock is now trading at just under a recent two-year high of 93.5c after a choppy past 12 months which saw Seven West hit a record low of 47c in February.

Brokers said Seven West climbed higher today after Ryan Stokes, chief executive of controlling shareholder Seven Group, said he was not looking to counter bid for Fairfax.

In his first public comments since the deal was announced, Mr Stokes said Seven West could prosper without pursuing M&A transactions, and that he would only consider deals with a strong growth rationale that made strategic sense.

“We’ve got a strong business and we will continue to build on that. The notion of consolidation makes sense where you can leverage that scale to create value,” Mr Stokes told The Australian.

“That’s where I think there are potential opportunities, but there’s certainly no necessity out there to do a deal in response to Fairfax and Nine. If they are trading that premium to get a bigger business then that makes sense for them. We don’t have a competitive concern.”

Mr Stokes leads Seven Group, a diversified investment group valued at $6.14bn with interests in industrial services, oil, and gas in addition to media. His father Kerry Stokes is executive chairman.