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Allens, Bakers, Freehills and Mallesons lead $4.1bn media deal

Allens, Bakers, Freehills and Mallesons lead $4.1bn media deal

Allens Arthur Robinson, Baker & Mckenzie, Freehills and Mallesons Stephen Jaques have taken the lead roles in the $4.1 billion deal that will create Australia's largest media company.  

Allens Arthur Robinson, Baker & Mckenzie, Freehills and Mallesons Stephen Jaques have taken the lead roles in the $4.1 billion deal that will create Australia’s largest media company.

Perth-based Western Australian Newspaper Holdings Ltd. (WAN) announced plans to acquire Seven Media Group from Seven Group Holdings and private equity firm Kohlberg Kravis Roberts & Co. (KKR) for $2 billion in cash and $2.1 billion in assumed debt.

Seven Media Group operates one of Australia’s three national television networks, as well as 25 magazines. The deal will create a company called Seven West Media, and is subject to approval by the Australian Competition and Consumer Commission.

Allens Arthur partners Guy Alexander, co-head of the firm’s M&A practice, and Tom Story are leading the team representing Western Australian. Both are in Allens’ Sydney office. Alexander previously advised on the reorganization of News Corp. prior to its move to the U.S.

Seven Media was represented by Freehills Sydney partners Fiona Gardiner-Hill, Rebecca Maslen-Stannage, and Damien Hazard. Maslen-Stannage advised Seven on a $3 billion merger with equipment distributor WesTrac last year, which is also owned by Stokes.

Baker & McKenzie advised KKR, which holds a 50 per cent stake in Seven Media. The team was led by corporate practice head Mark McNamara with the assistance of partners Julie Hutton, David Holland, and Tim Sherman, all in the firm’s Sydney office. Baker & McKenzie represented KKR in the initial acquisition of its Seven Media stake for $960 million in 2006.

“We advised KKR on the initial acquisition of the stake in [Seven Media Group] and have acted for them for a number of years,” said McNamara.

Mallesons partners Evie Bruce, Nigel Hunt, and Daniel Kirk acted for underwriters JPMorgan Chase & Co. and UBS A.G. Bruce is based in Sydney while Hunt and Kirk work in the firm’s Perth office. They were assited by senior associates Jonathan Grant and Alexei Fedotov, with solicitor Laura Steinke.

“The structure of the capital raising was very complicated,” said Bruce. “[It involved] three separate offers: an accelerated entitlement offer of convertible loan securities, a public offer of [WAN] ordinary shares and a sell-down of [Seven Group Holding’s] existing 24.3 per cent interest in WAN. A number of interesting legal and regulatory issues arose from the interdependence between the components of the capital raising.”

According to some commentators, the proposed deal is an attempt by billionaire Kerry Stokes, who owns controlling shares in both Western Australian and Seven Media, to build an empire comparable to those of mogul peers Rupert Murdoch and the late Kerry Packer.

Murdoch’s News Corp. had been by far the country’s largest media company before its corporate relocation to the United States in 2004.

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