Prime Media Group chairman John Hartigan.Credit:Louie Douvis
Prime pays Seven to broadcast its shows into the regional areas under a program supply agreement. In order to afford the dividend,Seven has agreed to the delay of payment of fees that are soon to be due under this contract,an ASX announcement posted by Prime on Monday morning said.
The sweetener comes after weeks of meetings between Seven West chief executive James Warburton and Prime chairman John Hartigan with shareholders to drum up support for the initial $64 million deal. While most investors saw merit in consolidation there had been feedback from a growing number that the offer price was too low and that Australian Community Media executive chairman Antony Catalano might move against the deal.
Mr Catalano,along with business partner Thorney Investment Group billionaire Alex Waislitz,had acquired a 14.57 per cent stake in Prime and sources familiar with his thinking said he considered the price to be “low ball”. This was in line with a report from Lonergan Edwards&Associates,which said the deal was"not fair but ... reasonable"and valued the shares at between 21¢ and 24¢.
Australian Community Media executive chairman Antony Catalano has been pushing back against the Prime-Seven deal.Credit:Jesse Marlow
The offer price was about 18.3¢ to 20.6¢,with the special dividend pushing the deal into this “fair” range.
Regal Funds Managements’ Philip King,who previously said he was not happy with the price,toldThe Sydney Morning Herald andThe Age this week that a special dividend would be enough to get him to vote yes on the deal. Large shareholder Spheria Asset Management was also supportive of a special dividend.
Bermuda-based billionaire Bruce Gordon is set to meet with Prime executives on Tuesday. He has not made his view on the deal public.