Kerry Stokes’ Seven West Media plans to merge with Australia’s biggest radio company, Southern Cross Media, in a deal that would create a $415 million television, radio and publishing group, before the billionaire exits the media business he created.
The tie-up, a complex share swap, will result in Southern Cross controlling the combined business with a 50.1 per cent majority stake, while Seven shareholders will own 49.9 per cent.
Southern Cross owns the Triple M Network as well as the Hit Network, which includes stations such as Melbourne’s The Fox, while Seven owns The West Australian newspaper and the Seven Network, which has AFL and cricket broadcast rights.
Seven West Media chairman and biggest investor Kerry Stokes backs the deal.Credit: Trevor Collens
Under the proposed deal, which will need to be approved by a majority of Seven’s investors at a vote in coming months, Seven shareholders will receive 0.1552 Southern Cross shares for every Seven West Media share they own, the companies said on Tuesday morning. The deal, which is subject to regulatory approval, is expected to be completed by early next year.
On completion, the combined company will be run by Seven chief executive Jeff Howard, with Southern Cross chief executive John Kelly to head its audio assets.
Seven chair Kerry Stokes, its biggest investor and one of the most powerful men in Western Australia, will step down from the merged companies’ board in February, with Southern Cross chair Heith Mackay-Cruise taking over. However, his family will retain a seat at the table, with son Ryan, chief executive of the Seven Group, remaining a director to represent the family’s 20 per cent stake.
Stokes backed the proposed deal on Tuesday and said it would bring significant financial and strategic benefits to shareholders.
“This is an important merger, as the combined company will be better able to serve both metropolitan and regional viewers, listeners, partners and advertisers,” he said in a statement.
While the departure of the 85-year-old billionaire from the board has prompted immediate speculation about whether the family may cash in and exit its stake in the media group, Howard said he has not been privy to any such discussions.
