The competition watchdog has given the green light for the proposed $40 million merger of Australian Women’s Weekly publisher Bauer Media and New Idea owner Pacific Magazines.
The ACCC had from October assessed the impact of the Bauer purchase, given the close competition between the parties’ key print magazines – Bauer’s Woman’s Day and Take 5, and Pacific Magazines’ New Idea and That’s Life!
However, ACCC chair Rod Sims on Thursday said significant declines in the circulation and revenue experienced by magazines were “sustained, substantial and likely to continue”, resulting in less investment in content and fewer retail promotions.
He said some titles had already closed, with others likely to follow – regardless of Bauer deal – while content offered by the four key magazines in question was all available from other sources.
“Ultimately, we determined that although there is a notable level of competition between the particular print titles, the transaction was not likely to substantially lessen competition because publishers in other media, particularly online publishers, will increasingly compete with Bauer,” Mr Sims said.
Pacific Magazines is Seven West Media’s magazine arm and the merger will likely bring some financial relief to the debt-laden Perth company.
Shares in Seven West rose 10.14 per cent to 7.6 cents by 1200 AEDT but have still lost nearly 80 per cent of value this year.
Seven West’s share price has nosedived more than 90 per cent since hitting a near four-year high of $1.11 in August 2018.
The company in October flagged it would use the cash generated by the sale of Pacific Magazines to pay down its significant debt, after that month also selling off its WA radio assets.
Australia’s largest production company, Seven West Media has more than $540 million in net debt and in February did not pay an interim dividend.
The company in February reported a $67 million first-half loss in a difficult operating market, weighed down by $165.5 million in impairments and challenging advertising conditions.
This week Seven West said the the postponing of the Olympics and AFL competition, along with a falling advertising market, meant earnings guidance would be scrapped.
Seven West said its rights payments for the Olympics would likely be deferred due to the revised scheduling.
However the media group may suffer cancellation costs from suppliers it engaged for Olympics coverage.