Seven and Prime Media deal set to rationalise costs and challenge ‘global behemoths’
The news this morning that Seven West Media would again be looking to acquire Prime Media Group has been met with a positive response by the market and media buyers.
Seven first attempted to buy the regional media group in 2019, but the acquisition was blocked. However, in today’s announcement, the Prime Media Group board indicated the bid had its support. On Friday chairman of Prime Media Group, Ian McGill, resigned from his post after eight months in the role. Non-executive director of the company, Cass O’Connor was named his replacement.
UM Sydney’s trading director Lorena Chiarella said of the deal: “It’s an exciting era of consolidation for Australian broadcast networks, finally being able to spread their wings and challenge the global behemoths with a total Australia footprint.
“As agencies, we hope these consolidation efforts make it easier for us to deliver greater value for our clients through more efficient and effective means of transaction with fewer parties and better technology.”
Publicis Media Exchange MD, Anthony Ellis added that with the rapidly changing landscape it was inevitable that there will be further consolidation across the Australian media sector in order for business to rationalise costs whilst also compete with global digital companies.
“The Seven West Media acquisition of Prime is a positive for advertisers, opening up opportunities to deliver national, integrated campaigns through one media company,” he told Mumbrella.
Pearman Media’s Steve Allen said Seven’s offer was “fully-priced”, with other major shareholder Australian Community Media buying up shares in Prime at the $0.24 a share mark.
James Warburton
Speaking on an investors call, Seven West Media managing director and chief executive officer, James Warburton, said the deal would halve a media buyer and clients’ workload. “The fact that they can come and deal with the entire nation, when you put it together from a CPM point of view, it will make us one of the most attractive media… we get to directly promote to a further 36% of Australians that we did not have direct access to.
“From a relative share point of view, when you look at being the number one network in the market and you have the power of all those assets together, it puts you top of mind for media buyers and clients.”
Warburton added that from an integration point of view, “a one-stop-shop simplicity of buy, will be an absolute game changer”.
When questioned about the potential risk of the deal not proceeding, as was the case in 2019, Warburton said 43.5% of Prime Media Group’s shareholders had indicated support for the acquisition, and he that “it is in the best interest of all shareholders”.
He added: “There is no ACMA (Australian Communications and Media Authority) conditions and the ACCC (the Australian Competition and Consumer Commission) approved it last time in 2019, and nothing has materially changed so, from that perspective we don’t perceive major risks.”
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Olivia Kruimel is the managing editor at Mumbrella. She has more than 15 years of experience in journalism, communications and marketing. Her journalism career began at Fairfax Media (now part of Nine) and includes various B2B publications such as B&T, Travel Today and ALB. As a marketer Olivia has worked for Standard Chartered and various global law firms.
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