At a glance
- Company
- Seven West Media Limited
- Ticker
- ASX: SWM
- Announcement
- Acquisition
Key figures
- ARN shareholding acquired
- 14.9%
- Equity swap interest
- 5.0%
- Price per ARN share
- $1.10
- Cost of share acquisition
- approximately $50.1 million
- Pro-forma FY23 leverage after transaction
- approximately 1.15x
- Announced cost initiatives
- $60 million
People
- Kerry StokesChairman
- James WarburtonManaging Director and Chief Executive Officer
November 13, 2023 -- Seven West Media Limited (ASX: SWM) today announced that it has acquired a 14.9% shareholding in ARN Media Limited (ASX: A1N) as a strategic equity investment in the media sector. SWM has also entered into a cash-settled equity swap with Barrenjoey Markets Pty Limited relating to a further 5.0% of A1N.
SWM has existing and long-standing commercial partnerships with A1N and has an interest in ensuring their continued and long-term success via a direct investment in A1N.
SWM is aware of the recent ASX announcements regarding non-binding indicative proposals involving A1N and others around consolidation in the sector, including developments over the last several days. SWM is supportive of A1N’s current business direction. SWM has no intention of launching a takeover for A1N (in the absence of an alternative control proposal) or Southern Cross Media Group Limited (ASX: SXL).
SWM Chairman, Mr Kerry Stokes, said: “Seven West Media has a disciplined approach to value creation in the media sector. We believe that this strategic holding presents strong value for our shareholders in light of sector consolidation activity.”
SWM acquired the shares at $1.10 per A1N share. SWM spent approximately $50.1 million in acquiring the 14.9% shareholding and has prefunded the swap on an equivalent pricing basis. SWM will lodge the ASIC Form 603 “Notice of Initial Substantial Shareholding”.
The share purchase and swap pre-funding will lift SWM’s pro-forma FY23 leverage from 0.9x (net debt / EBITDA) to approximately 1.15x. To the extent current advertising market conditions result in SWM leverage being above the target 1.0-1.5x band at the end of December 2023, the recently announced $60 million in cost initiatives would be expected to bring leverage back within the target range within a short period of time.
SWM Managing Director and Chief Executive Officer, James Warburton, said: “SWM’s objective is to be Australia’s most connected news, sport and entertainment brand. Our investment in A1N aligns with our strategic pillar of partnering for growth, and we look forward to continued collaboration across our two companies.”
This release has been authorised to be given to ASX by the Board of Seven West Media.
For further information, please contact:
Investors / Analysts:
Craig Haskins
[email protected]
0421 029 843
Media:
Rob Sharpe
[email protected]
0437 928 884
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In brief
Seven West Media Limited says it acquired a 14.9% stake in ARN Media Limited for $1.10 per share, spending approximately $50.1 million. It also entered a cash-settled equity swap tied to a further 5.0% of ARN. Seven West described the investment as strategic, citing its existing commercial partnerships with ARN and its support for ARN’s current business direction. The company said it does not intend to make a takeover bid for ARN or Southern Cross Media Group, absent an alternative control proposal. Seven West said the purchase and swap pre-funding would raise pro-forma FY23 leverage from 0.9x to approximately 1.15x. Chairman Kerry Stokes and CEO James Warburton said the investment reflects the company’s approach to value creation and its strategy of partnering for growth.
Key takeaways
- Seven West acquired 14.9% of ARN Media for $1.10 per share, at a cost of approximately $50.1 million.
- A cash-settled equity swap relates to a further 5.0% of ARN.
- Seven West said it has no takeover intention for ARN or Southern Cross Media, absent an alternative control proposal.
- The transaction is expected to raise Seven West’s pro-forma FY23 leverage from 0.9x to approximately 1.15x.
