The proposed merger of Australian broadcasters Seven West Media Ltd. and Prime Media Group Ltd. hit a roadblock after two major shareholders said they will vote against the deal.
The shareholders against the transaction are WIN Corp. Pty. Ltd. owner Bruce Gordon and former Domain Holdings Australia Ltd. CEO Antony Catalano. The deal is in jeopardy as Gordon holds a voting power of 11.59% of all Prime shares, while Catalano holds a voting power of 14.57% of all Prime shares.
The scheme of arrangement needs support from 75% of voting shareholders for the merger to win approval, meaning opposition from Gordon and Catalano effectively thwarts the merger, according to The Sydney Morning Herald.
Despite a special dividend being put on the table by Prime as a deal sweetener, Gordon rejected the merger, saying the proposal "is not a good value for current shareholders," Ad News reported.
Announced in October, the merger will see the combination of Seven West Media and regional broadcaster Prime Media Group through a 100% scrip-based scheme of arrangement. Should the deal be approved, Prime shareholders will receive 0.4582 Seven West Media share for each Prime share they hold, plus a special dividend worth 3 Australian cents for each Prime share they own.