Seven West may need raising, CLSA saysPUBLISHED: 0 HOUR 22...

Seven West may need raising, CLSA says
PUBLISHED: 0 HOUR 22 MINUTES AGO | UPDATE: 0 HOUR 22 MINUTES AGO

If Seven West Media were interested in Paul Ramsay’s 30 per cent Prime Media stake, it might have to consider an equity raising, according to CLSA analysts.
As reported last week, at least one bank has been sounding potential buyers for Ramsay’s holding. It would make sense for Seven West Media to be interested, given Prime is its regional television affiliate and Seven West already holds an 11 per cent stake.
Expected changes to media ownership laws, including the abolishment of the 75-per cent audience reach rule, would make it possible for the first time.
CLSA analyst Digby Gilmour says the stake could cost $130 million, which may be a stretch for Seven West Media’s balance sheet. Huying the stake could also lead to a takeover offer for the rest of Prime’s shares, under takeovers laws.
Gilmour said Seven West Media was geared at 2.9-times forecast 2013 financial year EBITDA, which could be enough to stop it pursuing cash acquisitions.
Gilmour said a $130 million rights issue at a 10 per cent discount to Seven West Media’s current trading levels would have negligible impact for the media company’s forward earnings per share.