Seven West Media completes Pacific Magazines sale to Bauer for $40m

Kerry Stokes-controlled Seven West Media has finally offloaded its Pacific Magazines business to Bauer for $40m.

Bauer’s Woman's will now be joined by a raft of Pacific Magazines titles under the company’s publishing umbrella. Picture: Supplied.

Kerry Stokes-controlled Seven West Media has finally completed the sale of its Pacific Magazines business to Bauer Media for $40m, bringing much needed cash to the debt-laden television broadcaster and publisher.

Under the deal, which was struck last October before the COVID-19 crisis, Seven will also receive $6.6m in advertising over three years from Bauer's publication.

The merger of the Australia's two major magazine publishers will bring Bauer’s 36 titles, including Women’s Weekly and Woman’s Day, together with Pacific’s roughly 20 mastheads such as New Idea and That’s Life!

Seven chief executive James Warburton, who was brought in by Mr Stokes last August to rebuild the television broadcaster and publisher and pay down its $541m debt pile, would be breathing a sigh of relief on Friday after the original completion date of April 9 was pushed back.

In a brief statement, Mr Warburton said "the completion of this transaction is a key step as we work to transform SWM."

“I want to thank all the staff at Pacific for their passion, commitment and tireless work over the years at SWM.”

The deal's completion comes just two days after Bauer announced it would temporarily suspend publishing some of its magazines, understood to include Harper’s Bazaar, Elle, OK! and NW, as part of restructuring plans during COVID-19. The move will affect up to 140 Bauer staff, with 70 to be laid off and a similar number stood down.

Seven’s statement didn't specify its plans for the much-needed sale proceeds, although paying down its mountain of debt is likely to be at the top of Mr Warburton's to-do list.

Seven is understood to be in regular contact with its lenders, keeping them up to date with its cost-cutting plans during the difficult trading environment, which has led to a sharp drop in advertising revenue.

Mr Warburton is cutting jobs and staff pay by 20 per cent during the coronavirus crisis, after dumping its annual earnings guidance in March.

Seven has also flagged tapping the federal government’s $130bn JobKeeper scheme.

Mr Warburton was also looking to sell and buy assets as part of his plan to turnaround the company, which last year relinquished its title as Australia’s No 1 commercial TV broadcaster to Nine Entertainment's Nine Network.

Since taking over the helm from Tim Worner, Mr Warburton has axed half his direct reports and sold Seven’s Western Australian radio asset, Redwave Radio, to Southern Cross Media for $28m.

However, Seven’s proposed takeover of Prime Media for $64m was halted by media proprietors Antony Catalano and Bruce Gordon last December, which led to Seven buying a 14.9 per cent stake in the embattled regional broadcaster.

Mr Warburton wasn't available to comment on Friday about his plans now that the magazine deal is completed. Bauer couldn’t immediately be reached for comment.

Bauer’s future in Australia remains under a cloud, with the German family-owned group understood to be considering exiting the market, which it entered in 2012 by acquiring James Packer’s ACP Magazines for $500m. It has hired accounting and advisory firm EY to help with its strategic review.