Australia-based Seven West Media Ltd. will merge with regional TV broadcaster Prime Media Group Ltd. through a 100% scrip-based scheme of arrangement.
Seven West Media will purchase all of Prime Media's issued shares through a scheme of arrangement under which Prime shareholders will receive 0.4582 Seven West Media shares for each Prime share that they hold. After the completion of the deal, Seven West Media shareholders will own 90% of the combined entity, with Prime Media shareholders holding the remaining 10%.
The combined business will be led by Seven West Media CEO James Warburton and will be chaired by Chairman Kerry Stokes.
The directors of Prime Media Group have unanimously recommended its shareholders to vote in favor of the deal, in the absence of a superior proposal and subject to an independent expert review concluding that the proposed transaction is in the best interest of shareholders. Following customary approvals and deal closing conditions, the scheme of arrangement is expected to be implemented in early 2020.
Seven West will also offload its Western Australian radio assets, called Redwave, to Southern Cross Media Group Ltd. for a cash consideration of A$28 million.
The company said the transactions will allow it to become a commercial premium broadcast, video and news network with a monthly Australian audience reach of 18 million people.