Seven West Seen Tempting Buyout on Ad Rebound
No television broadcaster in the developed Asia-Pacific region is tempting its owners with a cheaper buyout opportunity than Seven West Media Ltd.
Seven West, which beams the TV drama “Downton Abbey” to Australian homes, operates a web portal with Yahoo! Inc. and publishes Men’s Health magazine locally, has fallen 58 percent this year as investors worried about its debt amid a slowdown in advertising sales. The stock trades at 3.9 times earnings, less than any media company in the region with a market value of more than $100 million.
That’s a price that may compel Perth-based Seven West’s billionaire chairman Kerry Stokes, who yesterday agreed to sell another media asset, to attempt a takeover, BBY Ltd. said. Growing audiences will allow Seven West to boost revenue when advertising rates recover in 2014, estimates Commonwealth Bank of Australia. Stokes and co-investor KKR & Co. could offer a premium of 32 percent for the $1.3 billion company and still generate a 31 percent return on their investment in two years, according to Royal Bank of Scotland Group Plc.