Australia's Seven Network/KKR joint venture readies for new media ownership laws

Australia's Seven Network/KKR joint venture readies for new media ownership laws

	Published : Fri, 30 Mar 2007 01:49 By : Agencies Print this Story

SYDNEY (XFN-ASIA) - Seven Network Holdings Ltd said the Australian government's decision to implement laws relaxing the ownership of media assets next week will allow the lifting of restrictions preventing its joint venture partner, US buyout firm Kolhberg Kravis Roberts & Co (KKR) from having any influence on its television business.

Seven said in a statement that an additional KKR representative will now be appointed to the board of the Seven Media Group joint venture, bringing the number of KKR representatives to four on an expanded 10-member board.

It said Seven Media Group will continue to monitor and pursue investment opportunities as it already has been doing on an on-going basis.

The decision to implement the laws will abolish foreign ownership and cross media ownership restrictions, allowing foreign companies to enter the Australian media sector.

In November, Seven, Australia's second-largest television network operator, struck a deal with KKR in anticipation of the laws being implemented after being passed by federal parliament last year.

It formed a 4.0 bln aud joint venture with KKR firm through which KKR invested approximately 735 mln aud for a 50 pct stake in the new group while Seven received around 3.5 bln aud in cash.

At the time Seven said the new Seven Media Group will pursue opportunities both in Australia and New Zealand and include Seven's television, magazines and online businesses, such as its 50 pct interest in the Yahoo!7 joint venture.

Chairman Kerry Stokes, who holds a 47 pct interest in Seven, said KKR shares his vision of building Seven's competitive and financial performance while expanding the online business.

Seven has already built a 14.9 pct stake in West Australian Newspapers Ltd.

Rival Publishing & Broadcasting Ltd, which owns the larger Nine television network and has interest in the Foxtel pay television business, also formed a private equity joint venture last year in anticipation of the new laws coming into effect.

It formed a new media joint venture with private equity firm CVC Asia Pacific and received 458 bln aud in the process.

The two companies' private equity joint ventures are seen by analysts as being best placed to participate in an expected wave of merger and acquisition activity within the Australian media sector once the laws are implemented.

(1 usd = 1.24 aud)

bruce.hextall@xfn.com