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Takeover talk still targets The West

WHILE there may be a small run on The West Australian’s stock if cross media ownership laws change, it appears unlikely that the paper will become a takeover target.

The Federal Government had a tilt at deregulating Australia’s media ownership laws last month but that bill is currently held up in the senate. Parliament resumes next month but it is thought that much of the early part of that period will be concentrated on the Federal Budget.

There has been speculation in the market that Rural Press, Rupert Murdoch’s News Limited or even Kerry Stokes’ Seven Network could launch takeover bids if cross media ownership laws loosen.

A spokesman for the Seven Net-work said it was network policy not to comment on speculation.

Analysts are of the opinion that, if The West was to become a takeover target, it would have happened by now.

Rural Press could have made a bid by now as could have John Fairfax Holdings, which has long been considered a suitor of The West.

There was even speculation at the beginning of last year that Rupert Murdoch was considering selling the Sunday Times and making a bid for The West.

Fairfax could probably be ruled out of the equation because it is now tied up with a $1.08 billion dollar takeover of New Zealand’s biggest media company, Independent News Limited, part owned by Mr Murdoch.

There has been speculation that one of the benefits for Fairfax from the deal, other than a strong revenue stream, is that it could help provide the company with some protection from a takeover sparked by relaxation of cross media ownership laws.

Most analysts are of the view that the structure and operations of The West have made it an unattractive takeover target.

They say the monopoly daily would be a high-priced acquisition for most media owners and would offer few synergies in return and therefore was not a target.

It is considered a strong asset but its strong dividends and large share base make it a difficult proposition.

That view is believed to be the one favoured by management at The West, but WA Business News was unable to contact WA Newspaper Holding’s CEO Ian Law to confirm that.

DJ Carmichael analyst Justin Stewart said if any other media owner had wanted to do it they would have done it by now.

“We don’t expect any major changes to the fundamentals of the story,” he said.

“There may be a bit of a run on their stock as people may think they will be a takeover target.”

Mr Stewart agreed there could be more of a chance that Channel 7 could be a possible suitor for The West but felt it would be unlikely.

Channel 9 owner Kerry Packer could possibly make a play for the WA newspaper under existing cross media ownership laws.

Channel 9 Perth is owned by Sunraysia and some believe the fact that Mr Packer does not directly own the station could insulate him from the current laws.

However, Freehills Communications, Media and Technology partner Tony Borger said that would depend on the contract Mr Packer had with Sunraysia.

“The definition of control under the current laws is very broad and it depends on how that contract is structured,” he said.

If the media ownership laws change it is understood that there could still be some Australian Consumer and Competition Commission hurdles to clear because of The West’s monopoly status.

For media ownership laws to change, the Government needs four more votes in the senate.

It is proposing that a media owner be allowed to own a newspaper, a radio station and a television station in the same metropolitan city and two out of three in country areas.

A spokesman for Communi-cations Minister Richard Alston said the Government was still meeting with the four independents in the senate – Meg Lees, Len Harris, Brian Harradine and Shayne Murphy – to try and break the deadlock.

It is understood Ms Lees and Mr Harris are interested in supporting media owners being able to control two out of the three media streams in cities and that the two Tasmanian independents are open to change linked to new pay-TV laws.

Mr Alston’s spokesman said debate on cross media ownership laws would resume in June.

That means that no change is likely until August.

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