now this will be huge in america, page-3

some calculations seven underpriced Under the deal announced today the following assets are transferred into the new structure

Seven Media Group

(Seven and KKR own 50 per cent each)

Channel Seven

Pacific Magazines (publishes New Idea, marie claire, Better Homes and Gardens)

Seven's 50 per cent stake in Yahoo!7, its internet joint venture with Yahoo!

Chairman Kerry Stokes

Chief executive officer David Leckie


The following assets remain in Seven Network Ltd

14.9 per cent state in The West Australian newspaper publisher West Australian Newspapers Holdings Ltd

34 per cent stake in internet phone company Engin

Seven's real estate interests in NSW, Victoria and Western Australia

Seven Asia business

Various non-core investments

Pay TV subsidiary C7

Retains subscription TV rights for AFL 2007-11 seasons and 2008 Beijing Olympic Games

Executive chairman Kerry Stokes


Whats important is that Seven Network Ltd is to receive $3.2bn in cash "Seven will receive cash proceeds of about $3.2 billion and retain a 50 per cent holding in the joint venture."

Given there are 224,460,995 Seven Network shares on issue this equates to cash proceeds of about $14.25/share. This is assigning no value to the half share Seven Networks Limited will hold in the new entity, Seven Media Group. Nor is it ascribing any value to those assets still held by Seven Network Ltd (refer above).

IMHO at $12.80 close today SEV is a screaming buy up to $14.25/share at which point it will equate to cash proceeds share.

WAN is also a screaming buy-with SEV holding $3.2bn in cash and a 14.9% shareholding come the change in crossmedia ownership rules it is fairly obvious what will happen.


Ajax