Seven are going to make another attempt to buy Prime
SWM Release to ASX: Stockness Monster!
Seven West Media (ASX: SWM) today announced that it has entered into a conditional Share Sale Agreement to acquire all the business and related assets of Prime Media Group (ASX: PRT) via the acquisition of Prime Television (Holdings) Pty Ltd, Seven Affiliate Sales Pty Ltd and all their subsidiaries (“PRT Business”).
As a sale of a main undertaking for ASX Listing Rules purposes, the acquisition will be subject to a vote of the PRT shareholders to be held in December 2021.
SWM strongly believes in the rationale of a combined SWM-PRT Business, which will create the leading wholly-owned commercial premium broadcast, video and news network across Australia, reaching more than 90% of the Australian population every month.
Details of the proposal
The value of the PRT Business was determined with reference to the current trading price for PRT shares with a premium for control, reduced by the value of cash to be retained by PRT post sale:
• The value of PRT at the bid price is $131.9 million
• This is a 57% premium to the closing PRT share price on 29 October 2021
• By completion, PRT is expected to have approximately $10 million cash on hand with the balance of PRT’s cash held in various subsidiaries to be acquired by SWM
• On this basis SWM would pay PRT $121.9 million on completion
• PRT would be able to distribute net cash on hand to shareholders via a combination of franked dividends or capital return. Further details are included in PRT’s ASX release regarding the transaction, issued today
• Including cash acquired, SWM’s share of expected PRT distributions, and excluding transaction costs, SWM’s net investment in the PRT Business is expected to be approximately $72 million, reflecting a multiple of approximately 2.9x EV/FY21 EBITDA (adjusted for government subsidies)
PRT has indicated that its Board intends to unanimously recommend that PRT shareholders
vote in favour of the proposal in the absence of a superior proposal and subject to an
independent expert concluding that the proposed transaction is in the best interests of PRT