Category: Stock Market

There is an ASX share that’s recently transformed itself that’s not getting the attention it deserves.

That’s according to Fairmont Equities managing director Michael Gable, who reckons the time is ripe to buy into Metcash Limited (ASX: MTS).

“Metcash is transitioning from a food wholesaler facing structural headwinds to a hardware retailer and wholesaler with a market-leading trade offer,” he said on the Fairmont blog. 

“Based on the company’s results for the 6 months to 31 October 2021 (1H22), the transition is happening faster than expected.”

Hardware now contributes more than food

For a company associated with the ubiquitous IGA supermarket chain, it is incredible that the hardware business now brings in more money than groceries.

“The hardware division reported an outstanding result, with strong contribution from both the Total Tools acquisition and the pre-existing Independent Hardware Group (IHG) business.”

According to Gable, the trade segment is “the key driver of strength” within Metcash’s hardware division.

The hardware business saw revenue growth of about 18%.

“Profitability also improved meaningfully, with hardware posting EBIT [earnings before interest and taxes] margins of 6.7%,” said Gable.

“This was 160 basis points higher than 1H21 and the highest in over 7 years — and driven by Total Tools.”

Store roll-out and “retailer conversion strategy” at Total Tools is a “key growth driver” for Metcash, according to Gable.

“There were 94 stores in the network and Metcash is targeting [approximately] 130 stores by 2025 and plans to open [approximately] 10 stores per annum,” he said.

“This expansion is likely to lead to a material step-up in network sales and divisional EBIT of $85m over the next 5 years.”

Metcash’s supermarket business isn’t doing badly either

Despite being eclipsed by the hardware arm, Gable insisted Metcash’s supermarket business is in a “significantly better competitive position” than 2 or 3 years back.

“The company has been able to maintain a premium in shelf prices, has a successful store refurbishment program (where IGA retailers are re-investing in their stores), and has markedly improved its market share,” he said.

“To date, much of this market share has been retained.”

Metcash, due to its position as a wholesaler, is “a net beneficiary of inflation”.

That is because wholesale contracts are typically written in terms of a percentage of sales basis, rather than a flat dollars-per-item rate.

“Metcash is expected to pass on price inflation that it receives to its retail partners in order to maintain its relative price position in comparison to the market,” said Gable.

“This is where IGA has typically enjoyed a pricing premium given its increased convenience offer in comparison to the major competitors.”

Now’s the time to buy Metcash shares

A 2 December dip saw the Metcash share price bottom out at $3.92.

Back then, Gable forecast that he would buy in when the stock gained upwards momentum past the $4.30 “breakout” mark.

Well, the market has since cottoned onto Metcash’s tailwinds and has already driven the stock price up 10%. The Metcash share price closed Thursday at $4.34.

“Metcash should continue to rally from here,” said Gable.

“The slight dip and retest of the breakout from the past day or so is another buying opportunity before the share price gets too far away from the breakout.”

Longer term, Metcash shares have gained around 26% this year and 90% over the past 5 years. The stock also yields a handy 4.61% in dividends.

The post Now’s a small window to buy this booming ASX share: expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo 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.

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The Rural Funds Group (ASX: RFF) share price has risen by 20% over 2021. It has been a market-beating performance by the real estate investment trust (REIT) considering the S&P/ASX 200 Index (ASX: XJO) has only risen by 10.5% over the same time period.

Rural Funds is an agricultural farmland REIT which owns a diverse portfolio across almonds, macadamias, cattle, vineyards and ‘cropping’ (sugar and cotton).

What has been influencing the Rural Funds share price in 2021?

Rural Funds has seen a steadily climb of its share price over the last ten months. Indeed, it has gone up more than 30% since 24 February 2021.

A few months ago the business released its FY21 result which showed growth of the distribution for investors and an increase of the underlying value.

FY21 saw the pro forma net asset value (NAV) rise by 13% to $2.20. It generated 11.9 cents of adjusted funds from operations (AFFO) per unit – the rental profit – and paid a distribution per unit of 11.28 cents, which was an increase of 4%.

Management have a goal of increasing the Rural Funds distribution by 4% per annum. Rural Funds has guided another 4% increase in FY22 to 11.73 cents per unit.

The Rural Funds share price has continued to rise as it announced more acquisitions.

Recent acquisitions

On 8 November 2021, it announced that it was buying properties including a 1,917 hectare cattle and cropping property and a 4,130 hectare cropping property. Included with those acquisitions it bought were 20,733 ML of water entitlements which it plans to use to improve the productivity of the properties, including expanding irrigated cropping areas and pasture improvement.

It also announced the acquisition of two macadamias orchards totalling 475 hectares of land, located in Queensland. These mature orchards immediately added to income generation but still have the potential for improved yields and expansion of the planted area.

The above acquisitions led to Rural Funds changing its FY22 AFFO forecast to 11.8 cents per unit.

On 29 November 2021, Rural Funds announced that it had exchanged contracts for a 27,879 hectare cattle and cropping property aggregation. There is potential here for productivity improvements, according to Rural Funds. This acquisition came with 12,448 ML of water entitlements, which Rural Funds plans to use to improve the productivity, including expanding irrigated cropping areas and increasing the cattle carrying capacity through pasture improvement and additional water points.

Earlier this week, Rural Funds proposed the idea of increasing the guarantee to J&F. The guarantee currently generates a return of between 9.73% to 11.25%. If the guarantee is increased from $100 million to $132 million, the FY22 AFFO guidance will be increased to 11.9 cents per unit.

What to make of the Rural Funds share price?

The broker UBS has noted the recent acquisitions and thinks that it will add to earnings by around 8% by FY24.

However, the UBS rating on Rural Funds is only ‘neutral’ at the moment after the strong price run. The price target is $2.78, so the broker is expecting the Rural Funds share price to drop by just over 10% over the next year.

The post The Rural Funds (ASX:RFF) share price has gone up 20% in 2021. Is it still a buy? appeared first on The Motley Fool Australia.

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

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On Thursday, the S&P/ASX 200 Index (ASX: XJO) was on form and charged higher. The benchmark index rose 0.3% to 7,387.6 points.

Will the market be able to build on this on Friday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to end the week in a positive fashion. According to the latest SPI futures, the ASX 200 is expected to open the day 44 points or 0.6% higher this morning. This follows a solid night of trade on Wall Street, which late on sees the Dow Jones up 0.8%, the S&P 500 up 0.8% and the Nasdaq up 1%.

ASX opening hours

Today is of course Christmas Eve. As per previous years, trading will finish earlier than normal today. You’ll need to make sure you get your trades in before 14:00 Eastern Standard Time or you’ll miss out. The ASX share market will then be closed until Wednesday 27 December due to the public holidays on Monday and Tuesday.

Oil prices storm higher

It could be a great end to the week for energy shares such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) after oil prices pushed higher again. According to Bloomberg, the WTI crude oil price is up 1.15% to US$73.61 a barrel and the Brent crude oil price is up 1.7% to US$76.53 a barrel. Oil prices were boosted by reports that the worst effects of the Omicron variant might be more containable than previously feared.

Bega given neutral rating

The team at Goldman Sachs has given its verdict on the Bega Cheese Ltd (ASX: BGA) share price after its disappointing trading update. According to the note, the broker has retained its neutral rating and slashed its price target by 13% to $5.65. Goldman notes that its “earnings have been impacted by a decline in milk supply and pressure on margins, caused by continued strong competition for milk amongst processors.”

Gold price rises

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a decent finish to the week after the gold price rose. According to CNBC, the spot gold price is up 0.4% to US$1,810.1 an ounce. The gold price held firm despite easing Omicron concerns.

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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.

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The ASX 50 index is home to many of the highest quality companies that the ANZ region has to offer. And while not all shares in the index are necessarily in the buy zone, two that could be are listed below.

Here’s why analysts rate these ASX 50 shares as buys:

Cochlear Limited (ASX: COH)

The first ASX 50 share to look at is Cochlear. It is one of the world’s leading hearing solutions companies with a portfolio of industry-leading cochlear implant products. These include its Nucleus System and the Baha System.

But management isn’t resting on its laurels with these products. It continues to spend 12%-14% of its revenue each year on research and development. This is a significant spend and demonstrates the implant industry’s high barriers to entry and the competitive moat created by Cochlear through decades of R&D.

All in all, this leaves the company well-positioned to benefit from the ageing population tailwind over the 2020s and beyond.

Macquarie currently has an outperform rating and $256.00 price target on the company’s shares. This compares favourably to the latest Cochlear share price of $216.66.

Xero Limited (ASX: XRO)

Another ASX 50 share that could grow at a solid rate long into the future is Xero. It is a provider of a cloud-based business and accounting solution to small and medium sized businesses.

Thanks to its international expansion, acquisitions, the transition to the cloud, and its burgeoning app ecosystem, the team at Goldman Sachs believe Xero has multi-decade runway for growth. Especially if it can monetise its App Store successfully.

In light of this, it will come as no surprise to learn that Goldman Sachs is bullish on Xero. It currently has a buy rating and $158.00 price target on the company’s shares. This compares to the latest Xero share price of $142.06.

The post 2 ASX 50 shares to buy in 2022 appeared first on The Motley Fool Australia.

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• Xero (ASX:XRO) share price dips amid acquisition news
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Cochlear Ltd. and Xero. The Motley Fool Australia owns and has recommended Xero. The Motley Fool Australia has recommended Cochlear Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Today, the S&P/ASX 200 Index (ASX: XJO) notched up its third consecutive day of green. At the end of the session, the benchmark index finished 0.31% higher to 7,387.6 points.

It was a broadly green day on the Aussie market on Thursday. The sector lifting the highest out of the bunch was utilities. Although, real estate, industrials, financials, and healthcare were all close behind it. Meanwhile, tech shares caught some pessimism, with big names like WiseTech Global Ltd (ASX: WTC) and Afterpay Ltd (ASX: APT) moving lower.

However, the question is: which shares delivered the biggest returns to investors on the ASX today? Here are the top ten stocks that came through for investors:

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, Pexa Group Ltd (ASX: PXA) was the biggest gainer today. Shares in the property conveyancing platform rallied 6.50% despite there being no announcements from the company. However, another similar transaction facilitating platform, Link Administration Holdings Ltd (ASX: LNK) received a takeover bid for $2.9 billion yesterday. Find out more about Pexa Group here.

The next biggest gaining ASX share today was Magellan Financial Group Ltd (ASX: MFG). The funds manager gained 5.17% following a video update from Hamish Douglass hitting back at recent shareholder pressure. Uncover the latest Magellan Financial details here.

Today’s top 10 biggest gains were made in these ASX shares:

ASX-listed company	Share price	Price change
Pexa Group Ltd (ASX: PXA)	$18.35	6.50%
Magellan Financial Group Ltd (ASX: MFG)	$20.96	5.17%
Nickel Mines Ltd (ASX: NIC)	$1.44	4.73%
Ansell Ltd (ASX: ANN)	$31.92	4.04%
Summerset Group Holdings Ltd (ASX: SNZ)	$12.70	3.67%
Champion Iron Ltd (ASX: CIA)	$5.27	3.13%
Pilbara Minerals Ltd (ASX: PLS)	$2.81	2.93%
Ingenia Communities Group (ASX: INA)	$6.16	2.67%
Pendal Group Ltd (ASX: PDL)	$5.63	2.55%
Codan Ltd (ASX: CDA)	$9.39	2.51%

Our top 10 ASX shares today countdown is a recurring end-of-day summary to ensure you know which companies were making big moves on the day. Check-in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

The post Here are the top 10 ASX shares today appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler owns AFTERPAY T FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended AFTERPAY T FPO, Link Administration Holdings Ltd, and WiseTech Global. The Motley Fool Australia owns and has recommended AFTERPAY T FPO and WiseTech Global. The Motley Fool Australia has recommended Ansell Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Centuria Capital Group (ASX: CNI) share price finished in the green today after the company announced it has acquired more assets.

Shares in the company were swapping hands at $3.41 at market close on Thursday, up 1.49%.

Centuria Capital Group is a real estate funds manager boasting more than $18 billion worth of assets.

What did the company announce?

The Centuria Capital share price climbed after the company revealed it has taken over more than $466 million of healthcare properties in the last two months.

This includes 38 aged care assets in New Zealand for $276 million. These assets will be operated by New Zealand company Heritage Lifecare.

Centuria’s Australian-based Centuria Healthcare Property Fund will own 36% of the portfolio, while the remaining 64% will be owned by Centuria New Zealand Healthcare Property Fund.

In further news shared with the market today, Centuria Capital has also bought the $75.7 million Varsity Lakes Day Hospital run by Queensland Health. This includes six digital operating theatres, 24 consulting suites, physiotherapy services, a diagnostic imaging MRI facility, retail tenants and a gym.

The company has also secured a $38 million healthcare development site in Alexandria, Sydney.

Management commentary

Commenting on the news possibly pushing up the Centuria Capital share price, the group’s joint CEO Jason Huljich said:

These acquisitions provide unique opportunities to secure high-quality assets, further expanding Centuria’s healthcare platform across both Australia and New Zealand.

We foresee rising demand for bespoke, modern hospitals within our domestic market, which provide cost effective models of care that also focus on patient wellbeing.

Centuria Healthcare managing director Andrew Hemming added:

Demand for aged care real estate within New Zealand can continue to increase due to the undersupply of existing facilities and an increasing ageing population.

Centuria share price snapshot

The Centuria Capital share price has exploded by around 38% in the past 12 months and 30% year to date. It is also up more than 4% in the past month.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned more than 11% over the past year.

The company has a market capitalisation of roughly $2.7 billion based on its current share price.

The post What happened to the Centuria Capital Group (ASX:CNI) share price today? appeared first on The Motley Fool Australia.

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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.

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Novonix Ltd (ASX: NVX) shares have delivered the highest returns out of all the S&P/ASX 200 Index (ASX: XJO) companies in the past year. During this time, the battery materials company has experienced an 8-fold increase in its share price.

Now standing at a market capitalisation of over $4 billion, investors on the sidelines are trying to establish whether this high-flyer will deliver the operations to support its lofty valuation. For context, the company recorded $5.23 million in revenue for the year ending 30 June 2021. This equates to a price-to-sales (P/S) ratio of approximately 766.

Strong demand for electric vehicles is widely anticipated. However, Novonix will still need to prove it can carve out its place in the industry.

Plans for the year ahead

In the near term, ASX-listed Novonix will be focusing on advancing discussions with battery cell manufacturers. At the same time, the company plans to increase its annual anode production. Ultimately the first target is to reach 10,000 tonnes per year production by 2023.

Novonix’s purchase of a manufacturing facility in Chattanooga, Tennessee is an important pillar in the company’s first phase target. This facility will be producing high purity and high consistency anode material for long-life batteries.

Additionally, the company will continue to develop its patent-pending cathode technology. The technology is based on a dry particle micro granulation technique. In 2022, Novonix will continue its research and development of this method in its Halifax facility.

An expert’s take ASX-listed Novonix

Despite the team at Firetrail Investments being bullish on electric vehicles (EVs), they are more cautious when it comes to the Novonix share price on the ASX.

In a self-published article on Livewire, Matthew Fist of Firetrail provided a detailed look into the battery materials company. Importantly, Fist separated the currently revenue-generating business segment (battery testing and equipment) from Novonix’s other divisions.

From here, the portfolio manager estimated this moneymaking segment could be worth $100 million. However, with a $4 billion market cap, Fist pondered where the remaining value is to be found.

Soon enough, Fist outlined the anode materials business as the all-important portion of Novonix — writing, “This is the part of the business that the market is excited about.”

After some quick maths, Fist estimated that if the company were successful with its ambitions, it would produce $130 million of earnings before, interest, tax, depreciation, and amortisation (EBITDA) in FY2025. In turn, this 2025 forecast puts ASX-listed Novonix at an EV/EBITDA multiple of 43 times. For comparison, the battery materials average is between 10 to 15 times.

The post Will Novonix (ASX:NVX) grow into its multibillion-dollar valuation in 2022? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler 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.

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The Xero Limited (ASX: XRO) share price ended in the red on Thursday. This came after the company announced an acquisition this afternoon.

At the closing bell, the cloud accounting platform provider’s shares were swapping hands for $142.06 apiece, down 0.79%.

Xero set to acquire TaxCycle

In today’s statement, Xero advised will acquire leading Canadian tax preparation software company, TaxCycle for C$75 million (A$80.98 million).

The latest addition to the Xero portfolio comes as management seeks to drive growth in the Canadian market. This will provide the company with immediate access to an established Canadian income tax solution and customer base.

Based in Calgary, TaxCycle’s software enables Canadian accountants, bookkeepers, and tax preparers to manage and file income tax returns for their clients. The last figures indicate that almost 4,000 tax firms, and 16,000 individual accountants and bookkeepers use this service.

Calgary has a rapidly growing technology and small business community, with the start-up ecosystem valued at C$2.7 billion (A$2.92 billion). Furthermore, the market is on track to grow by 1,000 new tech companies in 2030.

Last month, Xero acquired United States-based Locate Inventory, expanding its profile across North America.

The TaxCycle deal is expected to be completed by 31 December 2021.

Consideration of C$70 million (A$75.59 million) will be settled through 71% in cash and 20% in shares in Xero. In addition, TaxCycle employees will be granted C$5 million (A$5.40 million) in restricted stock units that mature between one and three years.

Xero noted that transaction, integration, and operating costs are likely to have a minimal impact on its earnings before interest, tax, depreciation, and amortisation (EBITDA) for FY22.

What did management say?

Xero CEO Steve Vamos commented:

This announcement marks an important step in Xeroʼs commitment to extend and enhance our product offering for Canadian customers and partners by providing a product that meets Canadaʼs unique tax requirements.

We know tax compliance is a major driver for small businesses and their advisors to use Xero. This acquisition will provide us with immediate and long-term benefits in Canada and aligns with our strategy to drive cloud accounting adoption globally and deliver the best compliance experience in all our markets.

Xero share price snapshot

Since the beginning of the year, the Xero share price has lost around 3% in value. In contrast, the S&P/ASX 200 Index (ASX: XJO) has risen by around 12% over the same time frame.

As the 24th largest company on the ASX, Xero has a market capitalisation of roughly $21.3 billion.

The post Xero (ASX:XRO) share price dips amid acquisition news appeared first on The Motley Fool Australia.

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

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The Respiri Ltd (ASX: RSH) share price leapt 14% to 6.5 cents in early trading this morning. This came following the announcement of a distribution and marketing deal with a United States healthcare company.

At the closing bell, Respiri shares had wiggled back down to 5.9 cents apiece, a 3.5% increase from yesterday’s closing price.

Respiri’s telehealth deal

At its core, Respiri is focused on bringing simple respiratory solutions to those living with asthma.

Its primary product, wheezo, assists in the tracking and management of asthmatic symptoms. It also has the ability to share relevant information with doctors and caregivers.

The deal driving the Respiri share price today combines the efforts of US-based remote patient monitoring (RPM) provider mTelehealth, LLC with Respiri.

The partnership entails an initial request from mTelehealth for USD$150,000 (A$208,000) worth of wheezo devices and services to be delivered as early as next month.

Up until now, wheezo products had not been sold in the US.

Respiri also predicts the RPM market will grow by more than 30% by 2026, up to US$85 billion, due to the increase in asthma and chronic diseases.

Therefore, mTelehealth has predicted US$1 million in wheezo sales over the next five years and has agreed to obtain a minimum of 1,000 units every quarter.

This marks the first deal of its kind signed for Respiri.

Respiri CEO pleased with the partnership

Commenting on the news fuelling the Respiri share price today, CEO and managing director Marjan Mikel said:

We are particularly excited about our partnership with mTelehealth, a trusted RPM partner to many healthcare delivery organisations and physicians across the United States.

Marc [Poulshock, president and CEO of mTelehealth] and his team very quickly understood what patient benefits wheezo could provide and imparted invaluable local knowhow to help us better tune our US launch strategy and leverage the existing RPM CPT reimbursement codes available to Respiri.

Poulshock said there was “definitely a need for wheezo in the US” and the company was pleased to have entered the partnership.

Respiri share price snapshot

The Respiri share price has seen a year in red, declining by around 55%.

The company has a market capitalisation of $41.2 million based on its current share price and over 720 million shares issued.

The post Here’s why the Respiri (ASX:RSH) share price jumped 14% today appeared first on The Motley Fool Australia.

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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.

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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.

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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.

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