Doug Flynn chairman of WAN’s independent board committee, said the transaction presents an opportunity to transform WAN into a diverse and integrated national media business in one step.
He says, “While WAN occupies an attractive niche as the leading media business in the West Australian market, it must look to the future. Combining these two businesses will create a substantial combination of traditional and new media platforms to enhance WAN’s ability to compete effectively in the ever changing media landscape.”
Seven Media – which is owned by Australian media baron Kerry Stokes and private equity group Kohlberg Kravis Roberts – will received $1.081bn in WAN shares and $250m in convertible preference shares for a total value of about $1.3bn under the deal.
Stokes says, “This transaction will transform WAN into the largest listed Australia-domiciled media company. It is an opportunity for Australian shareholders to gain exposure to some of the best media assets in Australia with the combined businesses leveraging the highly successful management team from both WAN and SMG.”
The new entity Seven West Media will comprise wholly-owned operating businesses and key strategic joint ventures including:
- 100 per cent of WAN
- 49.9 per cent of the Community Newspaper Group
- 100 per cent of Pacific Magazines
- 50 per cent of online platform Yahoo!7
- 33 per cent of Sky News
Doug Flynn continues that the move is in line with consumer trends and the regulatory environment, which are underpinning the potential value in free to air television and online media formats.
He says, “Acquiring SMG provides us with exposure to free to air television and digital multi-channel growth. The transaction will give WAN a high quality earnings base, well diversified by platform geography.
“It will also provide WAN with substantially enhanced access to content with cross selling and synergy opportunities.”
Meanwhile, WAN has released its financial results for the first half of 2011 reporting a profit after tax of $50.1m for the six months to December 31 2010.
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