Prime concedes Seven West takeover won’t succeed
Prime accepts takeover by Seven West Media won't succeed, even as the competition regulator gives it a tick.
Prime Media has conceded its takeover by Kerry Stokes-controlled Seven West Media won't succeed following staunch opposition from the regional television broadcaster’s two major shareholders, Bruce Gordon and Antony Catalano.
On the same day the nation's competition regulator gave the green light to Seven's $64 million takeover offer, Prime said the deal is "unlikely to be approved" after seeing some early voting results ahead of Thursday's shareholder meeting in Sydney.
“Based on the proxies received from Prime shareholders to date, the Prime board considers that the scheme is unlikely to be approved by Prime shareholders by the requisite majorities," Prime said in a statement to the ASX.
Seven chief executive James Warburton said they are "disappointed with the likely outcome of the vote".
"The merger with Prime was a logical and good outcome for both sets of shareholders. Our great relationship with Prime will continue under our affiliation agreement and we look forward to delivering outstanding content for them in 2020," he said.
“We appreciate the co-operation of Prime’s board and management throughout this process.”
The news comes more than a week after WIN Corporation chairman Mr Gordon, who has voting power of 11.59 per cent in Prime, declared he was against Seven’s takeover.
Mr Catalano, who took ownership of the former Fairfax Media’s regional newspaper operations with billionaire investor Alex Waislitz mid-year, has built up a 14.57 per cent stake in Prime since February.
The former boss of the online real estate advertising group Domain first publicly voiced his opposition to Seven’s takeover of Prime in October.
Collectively, their investment in Prime gives them a 26.16 per cent blocking stake to Seven’s bid, which needs 75 per cent Prime shareholder approval to get over the line.
Despite the bleak voting outlook, Prime's shareholder scheme meeting in Sydney on Thursday morning will go ahead as planned to avoid having to pay a $600,000 break fee to Seven.
Prime chairman John Hartigan will retire following the meeting, as reported by The Australian.
If the deal fails to get over the line on Thursday, as expected, Prime and Seven will hold talks over its future working relationship.
"Prime has enjoyed a longstanding relationship with Seven and looks forward to working with Seven in the future," Prime said.
Meanwhile the Australian Competition & Consumer Commission said it would not oppose Seven's proposed acquisition of Prime on the provision Seven sold its Spirit and RedFM radio networks in regional Western Australian to meet requirements of the Broadcasting Services Act 1992.
The ACCC's investigation focused on regional WA, where Prime’s TV broadcasts overlap with the distribution of Seven's print and online newspapers, including The West Australian and regional mastheads.
“We found that Seven West Media’s largely weekly regional newspapers and Prime’s weeknightly TV bulletins generally cover different news stories,” ACCC chairman Rods Sims.
“We also looked at the likely impact on advertisers and news consumers across a number of different media markets, and concluded that the proposed acquisition was unlikely to substantially lessen competition or choice for advertisers and consumers,” Mr Sims said.
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