Seven West Media (ASX:SWM) has entered into an agreement with Seven Group Holdings in a move to raise $612m for greater financial stability. The deal will allow for the early conversion of all convertible preference shares held by major shareholder Seven Group Holdings into Seven West Media ordinary shares. The shares will be issued at $1.28 per share. The company will also issue a 2.27 for 3 conditional, accelerated, non-renounceable entitlement offer to eligible shareholders of new SWM ordinary shares at $1.25 per share, an 8.1 per cent discount compared to the closing price on 28 April 2015. Seven Group Holdings has agreed not to participate in buying the discounted shares. The investment bank UBS has agreed to underwrite $150m of the $612m offer.
Seven Media West is the company behind the Seven TV Network, West Australian newspaper and various magazines. The pro-rata offer will raise a minimum of $150m with the hopes of reaching $612m, depending on investor participation. Chief executive Tim Worner said the deal was designed to provide strength to the company’s financial position. “The proceeds from the capital raising will strengthen our balance sheet and add financial flexibility to pursue further growth opportunities available to us.” In February, Seven West announced a $994m half-year loss due to major writedowns to the value of its television assets. It reaffirmed its full-year net profit after tax guidance of $20m5 to $215m. Shares of SWM have been suspended from trading on Tuesday. SWM has fallen over 27 per cent in the last 12 months but has risen marginally by .74 per cent so far this year.
Author: Matthew Dibb
Apr 29, 2015
Matthew has an extensive track record in equity markets and derivative advisory. Spanning a career in several investment banks and prviate wealth groups including Macquarie Bank, his specialist knowledge relates to capital market advisory and equity market analytics. Matthew has a diploma in Financial Advisory, Applied Finance and is ADA 1 & 2 accredited.