DataRoom AM: Seven West brush-off

A possible merger of media giants Seven West Media and Fairfax Media is receiving plenty of press coverage, but a flagging share price has forced Seven to publically distance itself from such a possibility.

Also in media, a very public feud between Seven and Ten Network has seen rumours of News Corporation interest in Ten resurface as Fairfax and Ten seal a deal of their own.

Elsewhere, AGL Energy nears a decision on Macquarie Generation, Gina Rinehart reaches financial close on the giant Roy Hill project and Spotless Group inches closer to a $2 billion listing.

A 10 per cent drop in Seven West Media’s share price over the past fortnight has driven the company to refute persistent speculation it will consider a merger with Fairfax Media. The denial of talks came after Citi analysts said a deal could provide $125 million in synergies. Fairfax chairman Roger Corbett is believed to be interested in a deal with a free-to-air network if media ownership laws are relaxed.

Another media deal long spruiked, a purchase of Ten Network by News Corporation, owner of Business Spectator, has also come back into the spotlight. A court case in which Ten claims programmer John Stephens broke a contract with Ten to re-sign at Seven alleges that Stephens was in part convinced to stay after Seven execs asserted that a News acquisition was a sure thing. Ten boss Hamish McLennan said there was “no indication” a deal would eventuate.

That’s not the only action on the media front, with Ten and Fairfax sealing a deal to link their respective dating websites, Oasis Active and RSVP.

Fairfax will pay Ten $5m for 10 per cent in Oasis, which is 25 per cent of Ten’s stake. A sale of the merged business is tipped after Fairfax seals control of Oasis by buying out private investors in the firm.

Meanwhile, 21st Century Fox, which was split out of News Corp last year, has secured shareholder support for its planned May 8 delisting from the ASX.

In mining, Gina Rinehart has proved the doubters wrong by securing financial close for the mammoth $11bn Roy Hill iron ore project. The $8bn long-term financing deal, signed late last week, will see funding come from five export credit agencies within Japan, South Korea and the US as well as 19 banks, including the ‘big four’ in Australia. Roy Hill is 70 per cent owned by Rinehart’s Hancock Prospecting.

In IPO news, there is progress on the eagerly awaited $2bn float of Spotless Group as The Australian Financial Review reports owner Pacific Equity Partners has hired Deutsche Bank, Citi and UBS as lead advisors. A listing in the June quarter is forecast.

Elsewhere, AGL Energy is reportedly set to decide this week whether it will challenge the ACCC’s decision to block its planned $1.5bn takeover of Macquarie Generation, according to the AFR. It would be quite a surprise if it chose to walk away.

Finally, Etihad Airways is reportedly looking to raise its stake in German carrier Air Berlin and delist the firm from the London Stock Exchange. Given Etihad holds around 20 per cent of Virgin Australia Holdings, you can’t help but wonder if it has similar plans for Virgin, even if the large stakes of Singapore Airlines and Air New Zealand make such plans more complicated.