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SYDNEY - Australian billionaire Kerry Stokes gained approval to sell half of Seven Network's television and magazine assets to a new venture with Kohlberg Kravis Roberts (KKR), which could spell a buying spree in New Zealand.
At an extraordinary general meeting in Sydney yesterday, Seven Network shareholders backed the broadcaster's plans for a A$4 billion ($4.5 billion) spin-off of its media assets,
The move means the network is cashed up ahead of the expected shake-up of the media industry next year.
Seven will receive A$3.2 billion from the spin-off plan, but is yet to say where exactly it plans to invest the money.
The deal, which has been approved by Seven's board, is due to be completed next Friday.
Under the plan, Seven's television, magazine and online businesses, which include a 50 per cent stake in the Yahoo!7 internet portal, and titles such as New Idea, marie claire and Better Homes & Gardens, will be separated into a new company called Seven Media Group.
US-based KKR and Seven will each hold a 50 per cent stake in the joint venture.
Seven deputy chairman Peter Ritchie said the company would be the duo's vehicle to pursue media opportunities in Australia and New Zealand, in the television, magazine and online sectors.
"The agreement recognises Seven's strengths in television, magazines and online," Ritchie told the meeting.
"[It] delivers to Seven, our people and our shareholders, a venture with the strategic and financial flexibility to take advantage of the dynamics of the Australian and New Zealand media landscape."
In October, the federal Government passed new, wide-ranging media ownership reforms that allow media proprietors to own two of the three media platforms - TV, radio and print - in the same city.
The laws are expected to come into effect before the federal election next year, possibly as early as February.
The expected legislative change has already sparked a flurry of activity in the sector, with Seven's move being predicated by James Packer's Publishing and Broadcasting.
The rival Nine Network announced a A$4.5 billion deal to spin off its media assets into a separate company a month before Seven.
PBL is joint owner of the new company with private equity group CVC Asia Pacific.
Apart from its restructure, Seven has also grabbed a less than 5 per cent stake in Fairfax Media, publisher of the Sydney Morning Herald and the Australian Financial Review, and has forked out more than A$300 million for 14.9 per cent of West Australian Newspapers - the most it can buy under the current regime.
Rupert Murdoch's News Corp paid almost A$394 million in November for a 7.5 per cent stake in Fairfax.
This month, Fairfax agreed to buy Rural Press for A$2.7 billion, adding 170 regional newspapers to its metropolitan titles.
- BLOOMBERG, AAP
