Ann: Prime and Seven enter into Scheme Implementation Deed, page-11

I am a holder of both PRT and SWM. I can see how this is a great deal for SWM because:
. no cash just script
. no control premium
. 11m pa synergies (90% of which accrue to SWM shareholders)
. eliminates the risk that the affiliation fee goes to another broadcaster (say $5m pa) in the future
. extends advertising reach as detailed in page 5 of the SWM information memorandum (large population with high discretionary income, high weekly shop, etc)
. reduces gearing.

In any transaction where someone gets a great deal, its likely the other party is getting a dud deal. In this case it looks like PRT is getting a dud deal, driven by the director's fears that PRT's small relative size makes it increasingly irrelevant. The only redeeming aspect is that investment risk under SWM is spread over a bigger audience and print media. To my mind this positive aspect is more than offset by SWM's higher gearing.

I see the benefits of a merger but believe the terms of this deal are too lop sided, to the benefit of SWM