Prime Media Group will face a doomed shareholder vote after the competition regulator cleared the takeover of the regional broadcaster by Kerry Stokes’ Seven West Media.
The Australian Competition and Consumer Commission said the merger was unlikely to substantially lessen competition, not even in terms of content and news, as Prime is the regional affiliate to Seven already and produces its own regional news bulletins on weeknights.
Despite the competition watchdog’s decision not to oppose the deal, Prime is expected to come unstuck at the shareholder vote on Thursday morning because Bermuda-based billionaire Bruce Gordon and Australian Community Media executive chairman Antony Catalano have publicly opposed the scheme. The two have a combined share worth more than 25 per cent of votes.
Mr Gordon is the owner of rival regional broadcaster WIN TV and a shareholder in Seven’s major competitor Nine Entertainment Co, the owner of this masthead. Seven is the owner of television, newspaper and radio businesses and had planned to sell its regional radio networks Spirit and RedFM as part of the deal with Prime.
“We found that Seven West Media’s largely weekly regional newspapers and Prime’s weeknightly TV bulletins generally cover different news stories,” ACCC chairman Rod Sims said in a statement.
“We also looked at the likely impact on advertisers and news consumers across a number of different media markets, and concluded that the proposed acquisition was unlikely to substantially lessen competition or choice for advertisers and consumers,” he said.
He said advertisers in regional Western Australia had many ways to market themselves including newspapers, radio, digital and billboards, with state-wide campaigns typically undertaken by larger businesses as part of national campaigns represented by agencies.
“Feedback from advertisers and advertising agencies suggests that Prime’s television and Seven West Media’s newspapers don’t compete closely for advertising revenue, and most advertisers have alternative ways of reaching their target audiences.”
The ACCC is also set to make a decision on Thursday over whether to oppose Seven’s deal to sell its magazine arm Pacific Magazines to Bauer Media Group.
Prime chairman John Hartigan has criticised Mr Catalano and Mr Gordon for their decision to vote the television deal down saying they had “hijacked” the merger, with other investors like Spheria Asset Management and Regal Funds Management backing the deal and the special dividend that would come with it. Mr Hartigan is due to retire after the shareholder vote on Thursday.
Mr Catalano has pushed for the involvement of his newspaper business in a deal with the regional broadcaster and, alongside Mr Gordon and Prime, has urged the government to change media ownership rules to allow more consolidation among the regional media businesses.
Prime said in a statement posted to the ASX on Wednesday morning that the proxies received by the business show the scheme is “unlikely to be approved by Prime shareholders by the requisite majorities”, but the vote would still be held.
“Prime has enjoyed a long standing relationship with Seven and looks forward to working with Seven in the future,” it said.
Source: Thanks smh.com