Gordon Grabs Seven Stake In Prime
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Are we about to see our first deal from the changes to media laws?
Would be Ten bidder and Nine shareholder, Bruce Gordon, has grabbed a stake in the Seven Network’s regional affiliate partner Prime Media Group for $15.6 million.
Through his private investment vehicle Birketu (which is involved in Ten where Gordon has lost hundreds of millions of dollars), Gordon has snapped up 39 million shares in Prime at 40c each in a deal worth $15.6 million from Seven Group Holdings, which is controlled by Kerry Stokes.
The deal values Prime at $148 million.
Seven Group controls Seven West Media via a 41% stake.
Gordon now has a stake in Prime just under the current 15% ownership threshold. That was also the size of his stake in Ten which was lost when Ten collapsed in June and twas then bought by CBS of the US. He also owns a 14.9% stake in Nine Entertainment.
Gordon can’t make a takeover of Prime because of a rule preventing a single entity from operating more than one commercial TV licence in the same market. The law is not part of the Turnbull government’s media reform bill which will be back in the House of Representatives next month for final approval of the changes made in the Senate.
Chaired by John Hartigan, the former boss of News Corp’s Australian operations, Prime made a profit after tax of $35.6 million in the last financial year, buoyed by strong ad demand for the Rio Olympics.
Prime warned it could be hit by a sharp fall in earnings this financial year.
Prime Media recently suggested a reverse takeover of Seven West Media. Seven and its big shareholder dismissed that in a statement last week and the sale of the stake followed soon after.
Seven Group yesterday played a big part in beach Energy’s $1.5 billion purchase of Lattice Energy (Seven Group owns 22.7% of Beach which could rise to nearly 26% under the deal). Seven Group last week raised $400 million to help finance its $517 million purchase of the rest of Coates Media and its $1.084 billion in debt. The media didn’t rate.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.