Seven West (ASX:SWM) share price slumps despite good news of Prime acquisition

a man looks sad and reflective as he sits on his sofa with television remote control in hand.

The Seven West Media Ltd (ASX: SWM) share price slipped on Thursday despite the company’s acquisition of Prime Media Group Limited (ASX: PRT) clearing its final hurdle.

The takeover can now go ahead and will be completed on 31 December. However, the news didn’t elicit a positive response from the market.

As of today’s close, the Seven West share price is 61 cents, 0.81% lower than its previous close.

Meanwhile, the Prime Media share price surged 2.27% higher to trade at 45 cents.

For context, the S&P/ASX 200 Index (ASX: XJO) finished the day 0.31% higher.

Let’s take a closer look at the latest update on Seven West’s proposed takeover.

Seven West share price flops despite takeover news

The market bid the Seven West share price lower today despite its latest takeover surpassing the progress of its previous attempt to buy Prime Media.

Back in 2019, Seven West’s merger proposal was blocked by 53.5% of Prime Media’s shareholders. Today, more than 99% of Prime Media shareholders approved of the transaction.

Seven West is now set to take over its media peer for $131.88 million. That will see Prime Media shareholders receiving 36 cents per security they hold.

While that’s currently 20% less than the Prime Media share price, at the time Seven West posed its offer it represented a 56% premium on Prime Media’s previous close.

Prime Media operates the Prime7 television network in Eastern Australia and its sister network GWN7 in parts of Western Australia.

The transaction will be conducted through the acquisition of Prime Television, Seven Affiliate Sales, and all their subsidiaries, by Seven West.

The company believes the takeover will “create the leading wholly-owned commercial premium broadcast, video, and news network”.

Despite today’s dip, the Seven West share price is 32% higher than it was prior to announcing the acquisition. It has also gained 69% year to date.

The post Seven West (ASX:SWM) share price slumps despite good news of Prime acquisition appeared first on The Motley Fool Australia.

Should you invest $1,000 in Seven West Media right now?

Before you consider Seven West Media, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Seven West Media wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s