This is important. I am seriously concerned about the...

This is important. I am seriously concerned about the possibility of an opportunistic takeover of SWM. Right now, the SWM shares trade at truly absurd levels regardless of what valuation metric you prefer. The below article in the Australian (Written by Journalist Bridget Carter) is concerning to any SWM shareholder that rightfully wishes to participate fully in the upside of SWM shares in the years ahead. I hold the view that SWM is worth north of $1.50 a share based upon the strong revenue and profit growth the business will experience in FY25 and beyond but we certainly won’t get there if we get hit by an opportunistic and heavily undervalued takeover similar to what is happening now at ASXGH Pact Group. I have no idea whether the Australian is correct in their writing but its important that we fight back strongly against any such opportunism particularly when most SWM shareholders have patiently waited without dividends since 2017!

Our current CEO James Warburton has reiterated to the Financial Review that the ad market will rebound strongly. In his words “Television is the first to go, the first to come back,” Mr Warburton said on Tuesday. “There’s no doubt that the economy will improve. There’s the effectiveness – that’s never been questioned. We’re more effective than pretty much every other medium. The fact that we’re actually growing audiences.”

“As the economy improves, we remain confident the television market will stabilise and recover,” Mr Warburton said. “Seven’s market share puts us in a strong position to capture a much greater upside than the last downturn recovery cycle. These actions and benefits then provide the platform to create options for future growth.”

Our current Investor Relations Contact is Craig Haskins -Eastern Hill Advisors [email protected] (full contact details on the bottom of the SWM 1H FY24 Interim Announcement https://hotcopper.com.au/documentembed?id=uOMxKKzFkiWRTLKhOROKAxjvTDYL4ge%2FzxT0v%2BRu8rFiGug%3D

I encourage all SWM shareholders to politely write or call Craig to communicate your concerns at what could be turning point as to whether an unacceptable and opportunistic privatisation is launched against us.

If the Australian newspaper is wrong then that’s absolutely great but if not SWM shareholders need to get busy in communicating our displeasure at any attempt to take our shares particularly because the shares largely trade at such absurd levels of lower than 70 cents largely because the dividend has been on hold since 2017!
I trust SWM Management and the Board but it is important to make sure ALL shareholders benefit from the upcoming ad market recovery.

Time right for Stokes to privatise media empire - DATA ROOM

One of the things that may have been lost on observers of Seven West Media’s result last week is that the company’s market value is now close to the overall net debt.

With net debt to earnings before interest, tax, depreciation and amortisation at 1.3 times, or one times before acquiring a stake in ARN Media, could now be the right time for billionaire Kerry Stokes to privatise his media empire?

Seven West’s net profit fell 53 per cent for the six months to December to $54m. Its market value is now $384.8m, and its net debt is $257m. Yet if the market value falls further, the reality is that the Stokes family could buy the publisher of Western Australian newspapers and free-to-air broadcaster and run it for cash flow.

Currently, Seven Group Holdings, which is backed by the billionaire Stokes family, owns 40 per cent of Seven West Media.

The question is whether the family would want to own the entire business. But billionaires have form when it comes scooping up assets for bargain prices. This was seen last year when Raphael Geminder bid for the part of packaging company Pact Group he did not already own when its share price hit rock bottom. Seven also gained control of Boral last year by amassing a stake and then gradually creeping up the register to gain a stake of more than 70 per cent, taking control of the country’s building material provider without paying a decent premium. Now it is one of its best performing companies in the Seven portfolio, delivering double-digit earnings before interest and tax margins.

CREDIT: BRIDGET CARTER