Another sign of media sector consolidation
SYDNEY — Seven Group Holdings, owner of top-rating free-to-air web Seven Network, announced Monday that it has reached agreement with West Australian Newspapers for what’s effectively a takeover by WAN of the TV group, creating Oz’s biggest diversified media biz.
The A$4.1 billion ($4.14 billion) entity marks further consolidation of the Aussie media sector. The group will combine WAN’s newspaper interests with Seven Group’s free webs and magazine interests just a year after Seven Network merged with heavy machinery group WesTrac to create Seven Group Holdings. It also comes after the expansion of the Seven Network in a joint venture with private equity firm KKR in 2006.
“The media landscape is evolving rapidly,” said Seven topper Kerry Stokes. “Today’s announcement provides a significant opportunity for shareholders to participate in this expanding sector. The proposed transaction to create Seven West Media brings together some of Australia’s best-performing media businesses and their management teams.”
Stokes is the one feature that binds all the companies. The billionaire media mogul is the chairman of WAN and exec chairman of Seven Media Group, and he had a controlling interest in WesTrac before the merger.
For Stokes the move may have been a preemptive one, as rumors persisted that KKR was unhappy with its share of Seven Group after media stocks plunged and that it was looking to float the media org. Such a move would explain the fact that there are few obvious synergies for the merged entity considering WAN will have to take on more than a billion dollars in debt to purchase Seven Media. But one thing the deal does do is keep Stokes very much in the driver’s seat of the new entity.
Deal will now go to WAN shareholders for a vote on the proposed deal.