The Global Media Weekly for executives and entrepreneurs

Bauer haggles over Pacific

SevenWest Media has agreed to push back the completion date of Bauer Media Australia’s $40m acquisition of its Pacific Magazines (PacMags) subsidiary to May 1, but says no terms of the deal have been changed. The apparent agreement follows proceedings lodged this week in the New South Wales Supreme Court to compel Bauer to complete the deal which had originally been scheduled to be completed yesterday (April 9).

Since the deal received regulatory approval last month, there has been speculation about whether Bauer was trying to avoid buying PacMags or pay a reduced price.

Last week, the plot thickened with Bauer’s decision abruptly to close down its New Zealand subsidiary after a deterioration in its finances. Media speculation has fed on the saga, not least because Bauer’s management in Australia had planned to move quickly to complete once the regulatory approval came through, with meetings and interviews scheduled and then cancelled on last-minute instructions from the Hamburg parent.

Announcing the ‘agreement’ to complete on May 1, SevenWest Media told investors that the acquisition contract was unconditional and Bauer solicitors had contacted the company noting it was “aware of its obligations”. It is assumed the deal will, therefore, ultimately go ahead and that there will be no court hearing, as currently scheduled, on 26 April. The next question is: what will happen to Bauer Media Australia? Who will acquire Australia’s largest (by far) magazines business and when?

Will Future pay less for TI Media?

Bauer’s attempt to renegotiate the terms of the agreed acquisiton, in the light of the sharp deterioration in trading due to COVID-19, raises obvious questions about the UK deal in which Future Plc has agreed to acquire TI Media for £140m. Insiders are working towards completing the deal. But it is not known whether Future has been able either to reduce the price or defer some of the consideration or even if it is trying to.

There is believed to be no more provision for such a price renegotiation than with the Aussie deal: both were subject only to the approval of the respective competitions regulators. In the event, the Pacific deal was approved straightforwardly, but the TI Media one is conditional (oddly) on the divestment of three relatively minor brands, Amateur Photographer, World Soccer, and Trusted Reviews. The risk that any delay in those disposals could cause the deal to ‘time out’ might, conceivably, have represented some leverage for Future. We shall see.