No Fairfax bid lifts Seven West shares

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

Seven Group CEO Ryan Stokes is not looking to put in a counterbid for Fairfax.

Shares in free-to-air broadcaster Seven West Media rallied after the Stokes family ruled out a counterbid 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 yesterday, finishing the session up 4.17 per cent at 88c, as the wider sharemarket closed down 0.55 per cent.

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 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 that saw Seven West hit a record low of 47c in February.

Brokers said Seven West climbed higher yesterday after Ryan Stokes, chief executive of controlling shareholder Seven Group, said he was not looking to put in a counterbid for Fairfax.

In his first comments since the deal emerged, Mr Stokes said Seven West could prosper without pursuing mergers and acquisitions transactions and 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,” he 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.