Pacific Magazines begins court proceedings against Bauer Media
Pacific Magazines is taking Bauer Media to court over the $40m acquisition of its business which was given the green light last month.
The takeover was scheduled to be completed on Thursday, with Seven West Media’s magazine arm now seeking support from the courts to ensure the deal goes ahead.
The Bauer Media and Pacific Magazines deal seems to have hit another hurdle
The acquisition was held in limbo until a decision was handed down by the Australian Competition and Consumer Commission (ACCC) at the end of March, approving the deal and giving German-owned Bauer the go ahead to complete its purchase.
The case will be put before the NSW Supreme Court on April 26. Mumbrella understands it is being billed as a ‘normal commercial list proceeding’ to hold Bauer to the contract that was signed and is unconditional.
In an update to the Australian Securities Exchange (ASX) today, Seven advised it has received an email from Bauer’s solicitors saying: “Bauer is aware of its obligations under the Sale of Business Agreement and, as you
know, has been actively engaged since October 2019 in preparing for completion”.
There have been rumblings that amid the coronavirus (COVID-19) pandemic and the economic downturn, Bauer Media was looking to amend the agreement and potentially pay less for Seven’s magazine assets.
In the time it took the ACCC to approve the deal, Bauer has undertaken a number of cost-cutting measures, including closing its entire New Zealand arm and cutting the use of all freelance journalists across its Australian business.
Mumbrella understands some parties are concerned that should Bauer Media choose to exit Australia, or be unable to continue business here, the deal would fall flat and Seven would be left without recourse.
Bauer Media is the publisher of the Australian Women’s Weekly, Woman’s Day and Gourmet Traveller, among other titles. Pacific Magazines publishes Who, Better Homes & Gardens and Marie Claire.
Bauer Media has been approached for comment. A Seven spokesperson said the business is unable to comment on a matter that is before the courts.
The staff have been treated so abominably throughout this whole disaster of a deal. The executives who created this mess really are on notice.
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So what happens to the poor staff on both sides who have been waiting now 6 months for an outcome so they can move on with their lives? Communication with staff has been non existent, broken promises and failed deadlines, stringing people along. More months ahead of anguish and uncertainty? How can they get away with treating people this way? Disgusting the way staff have been treated during this whole thing.
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Bauer DOES NOT need to exit Australia to get our of the pacmags saga. it is a rip-off now for 1m let alone 40+m and 6+m for ad revenues in the next 3 years!!. Luckily, Bauer is able to get out, they shall and will, of the pac mags takeover deal through material adverse change clause(mac clauses). easy peasy, they will surely win if this ends up in court. Bauer just can NOT lose in this either using MAC clauses to get out of the deal or sue the lawyers representing Bauer in this transaction for malpractice if MAC clauses for some reason can not be invoked here for COVID-19 pandemic which is VERY easy to prove in even beyond a reasonable doubt if Swm wants to!, let alone in preponderance of the evidence in the civil court. lucky escape for Bauer phew..
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Awful for staff of course, and difficult to see Bauer relishing either the purchase or a protracted legal stoush. I’d suspect 7WM will be praying for the $40 mil deal to go ahead as signed for their own corporate survival. Meanwhile the value of the assets in question continue to plummet by the day, with no relief in sight. Desperate days indeed, and my sympathies go out to all involved.
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Bauer will complete, but at a significant discount – this is just posturing from 7WM, they want to get out at any cost.
I’m guessing $20m will get this done. Agreed with many of the comments above re the staff…
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There is no MAC clause in the agreement.
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