Seven West (ASX:SWM) share price slumps despite good news of Prime acquisition

Seven West’s takeover of Prime Media has been given the final tick of approval.

| More on:
a man looks sad and reflective as he sits on his sofa with television remote control in hand.

Image source: Getty Images

The Seven West Media Ltd (ASX: SWM) share price slipped on Thursday despite the company’s acquisition of Prime Media Group Limited (ASX: PRT) clearing its final hurdle.

The takeover can now go ahead and will be completed on 31 December. However, the news didn’t elicit a positive response from the market.

As of today’s close, the Seven West share price is 61 cents, 0.81% lower than its previous close.

Meanwhile, the Prime Media share price surged 2.27% higher to trade at 45 cents.

For context, the S&P/ASX 200 Index (ASX: XJO) finished the day 0.31% higher.

Let’s take a closer look at the latest update on Seven West’s proposed takeover.

Seven West share price flops despite takeover news

The market bid the Seven West share price lower today despite its latest takeover surpassing the progress of its previous attempt to buy Prime Media.

Back in 2019, Seven West’s merger proposal was blocked by 53.5% of Prime Media’s shareholders. Today, more than 99% of Prime Media shareholders approved of the transaction.

Seven West is now set to take over its media peer for $131.88 million. That will see Prime Media shareholders receiving 36 cents per security they hold.

While that’s currently 20% less than the Prime Media share price, at the time Seven West posed its offer it represented a 56% premium on Prime Media’s previous close.

Prime Media operates the Prime7 television network in Eastern Australia and its sister network GWN7 in parts of Western Australia.

The transaction will be conducted through the acquisition of Prime Television, Seven Affiliate Sales, and all their subsidiaries, by Seven West.

The company believes the takeover will “create the leading wholly-owned commercial premium broadcast, video, and news network”.

Despite today’s dip, the Seven West share price is 32% higher than it was prior to announcing the acquisition. It has also gained 69% year to date.

Should you invest $1,000 in Seven West Media right now?

Before you consider Seven West Media, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Seven West Media wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Mergers & Acquisitions

A woman pulls devil rock'n'roll hands and sticks her tongue out whilst headbanging, she's rocking it.
Mergers & Acquisitions

Here’s why the Brambles share price is rocketing 11% on Monday

The company confirmed it's in takeover talks this morning.

Read more »

Rocket powering up and symbolising a rising share price.
Mergers & Acquisitions

Infomedia share price rockets 30% following takeover approach

Infomedia shares are rocketing after receiving a takeover approach...

Read more »

A man in a suit looks surprised as he looks through binoculars.
Mergers & Acquisitions

Brambles share price on watch as takeover talks confirmed

The ASX 200 pallet maker could soon face a $20 billion takeover bid.

Read more »

an attractive woman gives a time out signal with her hands, holding them in a T shape, indicating a trading halt.
Mergers & Acquisitions

Infomedia share price halted amid takeover approach

Infomedia is a takeover target

Read more »

a woman drawing image on wall of big fish about to eat a small fish
Bank Shares

NAB share price lifts amid Suncorp rumours

NAB shares are up amid acquisition rumours.

Read more »

a medical researcher rests his forehead on his fist with a dejected look on his face while sitting behind a scientific microscope with another researcher's hand on his shoulder as if giving comfort.
Mergers & Acquisitions

CSL share price cracks under Vifor Pharma acquisition delay

Regulatory delays are causing concern...

Read more »

changing asx share price from acqusition represented by man reaching out to touch acquisition sign
Mergers & Acquisitions

AUB share price halted amid $880 million acquisition

Let's take a closer look.

Read more »

Red buy button on an apple keyboard with a finger on it.
Healthcare Shares

Broker says the Cochlear share price is in the buy zone following Oticon acquisition

Cochlear shares could be in the buy zone...

Read more »