UPDATED: Seven West Media Takes Bauer To Court To Ensure $40 Million Sale Of Pacific Mags Goes Ahead
Yesterday Seven West Media commenced legal proceedings at the NSW Supreme Court in order to compel the completion of the $40 million sale of Pacific Magazines to Bauer Media.
Seven West Media first agreed to sell Pacific Magazines to Bauer Media in October 2019, but the sale was held up by the ACCC, which was investigating how the takeover would impact competition in the market.
The ACCC formally gave the green light for the deal to go ahead in late March, and the sale was due to be completed on the 9th of April 2020.
Seven West Media’s statement on the ASX today said: “The Bauer transaction is being pursued to completion. The contract is unconditional following the ACCC’s clearance.”
Some have speculated that Bauer Media may have been trying to negotiate a lower sale price, given the difficult economic climate created by the COVID-19 pandemic.
Bauer Media Australia has already implemented a number of cost-cutting measures, such as suspending the use of freelance journalists, and last week Bauer Media closed its operations in New Zealand.
Bauer Media’s solicitors have contacted Seven West Media since the latter began court proceedings, stating: “Bauer is aware of its obligations under the Sale of Business Agreement and, as you know, has been actively engaged since October 2019 in preparing for completion.”
Given that the COVID-19 pandemic slashed income for many of Australia’s media companies, Seven West Media would understandably be eager to have $40 million coming in.
Yesterday the Australian Financial Review (AFR) alleged Seven West Media had sent “information about its West Australian Newspapers business to interested parties, including details about potential synergies available for a new owner”.
However, Seven West Media said in its ASX statement today: “The article in the AFR is not correct regarding a prospective sale of West Australian Newspaper.”
The AFR also stated in its piece that “sources close to Seven West Media said WAN was not for sale – and the information was provided in response to inbound inquiries.”
In the company’s half year results for FY 2020, published in February, Seven West Media did state that two of its strategic priorities were reviewing undervalued/surplus assets following inbound enquiries (with regard to working down debt and transformation), and exploring transformative merger and acquisition opportunities.
At the time of this announcement, James Warburton, the Managing Director and Chief Executive of Seven West Media, said: “My mandate is to dramatically change the business, which means transformative M&A opportunities are very much on the agenda.”
UPDATE 09/04/2020: On the 9th of April Seven West Media announced that it had agreed to a revised sale completion date of the 1st of May with Bauer Media for the sale of Pacific Magazines. However, all other terms of the sale were to remain unchanged. “SWM notes the extended date is not materially adverse as Pacific receives the April revenues (5 weeks),” the company’s statement on the ASX said.