Seven West strikes $92m worth of M&A deals

Seven West Media has announced an agreement to acquire regional TV broadcaster Prime Media, while the Kerry Stokes-chaired company will also divest its radio assets in Western Australia to Southern Cross Austereo.

Seven West is offering 0.4582 shares for every one in Prime, valuing the latter at $64 million.

Prime Media owns the GWN7 television network, which services of WA outside metropolitan Perth and is an affiliate of the Seven West-owned Seven Network.

Canberra-based Prime also owns the Prime7 television network, which is the GWN7 equivalent in the eastern states.

Prime's board has unanimously recommended the transaction.

Seven West chief executive James Warburton said the deal would allow advertisers to reach more than 90 per cent of the country's 25 million population each month on a single platform.

"The proposed transaction is a game changer for advertisers and media buyers and cements SWM's position as the superior advertising offering," he said.

"Overnight, SWM will be the leading wholly owned commercial premium network."

Seven West said the merger was expected to be finalised in January and would generate annualised cost synergies of $11 million through the removal or reduction of duplicated costs, consolidation of premises, and removal of Prime's ASX listing costs.

In addition, Seven West also announced today that Southern Cross Austereo will pay $28 million for Redwave Media, which is its WA radio business.

However, this transaction may have difficulty getting the green light from the Australian Communications and Media Authority and the Australian Competition and Consumer Commission.

Redwave, which trades as RedFM, has its Spirit 621 licence in the Southwest/Bunbury of WA, where SCA already operates its Hit and Triple M radio licences.

RedFM operates across all of WA. 

SCA chief executive officer Grant Blackley said the Redwave acquisition made sense for the company.

"Redwave Media is a logical acquisition for SCA, which already has Australia's largest regional radio network," he said.

Shares in Seven West Media were down 0.8 per cent to trade at 38 cents each at 12.50pm AEST.