Status of Media reform, page-35

AFR
Prime Media's John Hartigan pitches Seven West Media takeover

You can't call them complacent: Prime Media has deal fever. Sure, everyone's talking to everyone and all that, but the regional broadcaster's chairman John Hartigan and his harried chief executive Ian Audsley have in recent weeks briefed their shareholders on specific plans to transact themselves out of oblivion's path. (what's that all about?)

Veteran UBS adviser Robert Mactier has been (thanklessly) carrying Big Harto's pitch up and down the street. The Prime bumpkins are touting a reverse-takeover of their metropolitan content wellspring – marginally ambitious given their respective sizes. Seven West's market capitalisation is $1.23 billion to Prime's $164 million so Big Harto could only buy Kerry Stokes' free-to-air market leader with John Singleton's favourite currency: lemonade stand IOUs. Perhaps the ludicrously expansive scheme is just a way of getting the Stokes clan to the table?

Prime's paper (much to the welcome surprise of its register's major dwellers Stokes, Perpetual and Perennial) has surged to 47¢ from 26¢ a year ago (when its market cap sank to a dismal $95.2 million). Clearly the market is yet to focus on Prime's affiliation terms (36¢ in the revenue dollar) with Seven expiring in 21 months. Nine Entertainment's Hugh Marks extracted circa 50¢ in the dollar (even net of Nine's regional news production costs) from his old mate Gert Cackley at Southern Cross, leaving poor old Bruce Gordon to pair WIN with the litter's runt, Ten Network. In June 2019, Gordon – not far from his 110th birthday – will likely seek Seven's feed over Ten's. Whether Prime loses its high-rating feed to a bid from WIN's Wollongong hillbillies (though hitching to a CBS-controlled Ten still finding its feet could be an astute deal) or has its entire margins wiped out under its next contract with Jones Bay, the company hasn't got much to look forward to. Which hardly makes it a rare bird in its industry.