Prime vows to push on for Seven deal after it was blocked by 'bullies'
Prime Media Group chairman John Hartigan has accused billionaire Bruce Gordon and Australian Community Media boss Antony Catalano of being bullies and using the regional broadcaster as a "plaything", saying the network would continue to look for a deal with Seven West Media.
Mr Hartigan said Seven was likely to reveal it had taken a large stake in Prime later this afternoon and, despite a 53.5 per cent shareholder vote against a merger with the metropolitan broadcaster, the regional broadcaster would push ahead with trying to secure a deal.
Prime chairman John Hartigan retires on Thursday. Credit:Angela Wylie
"One of the people I ran into the other day likened it to a couple of billionaire elephants scrapping around for effectively peanuts because if you look at our market cap, it's in the mid-$60 million," Mr Hartigan said.
"If you look at the vote, 77 per cent of the proxies that we received before the meeting, the majority of the vote if you exclude Gordon and Catalano supported the deal," he said. That showed the pair was "out of tune with the missions of the majority of our shareholders", he added.
"I'm hugely disappointed, I think it's a dreadful shame for a company that two big shareholders running their own agendas that aren't aligned in any way with the majority of shareholders on our register have used this company as a plaything."
Today was to be a life raft for us, and two shareholders have hijacked that opportunity.
Prime chairman John Hartigan
Prime is the regional affiliate for Seven content. The Australian Competition and Consumer Commission gave the green light to a merger of the two on Wednesday. Mr Gordon is a major shareholder in Seven rival Nine Entertainment Co, the owner of this masthead.
"As far as we're concerned Seven has been our partner for a very long time, we will stay very engaged with them. We will continue to pursue every aspect of presenting this deal back to shareholders in some form. We're committed to it," Mr Hartigan said.
"We're not going to shy away from what's best for the company because of a couple of bullies," he said.
He warned that if the current earnings trajectory continued the business might be left having to look at cutting newsrooms.
Prime chief executive Ian Audsley said the market for advertising revenue was "choppy", making it hard to forecast, but he said the regional broadcaster was number one in its markets and "reluctant" to cut its news content.
"We'll fight very very hard to keep the business in good financial shape before we get to that," he said.
Citing the latest Standard Media Index advertising figures, Mr Audsley said total ad spending had fallen significantly, with Tasmania, South Australia and Western Australia bearing the brunt of it.
"What is happening is the money is concentrating on the east coast of Australia and coming from regional areas to support bigger media, so at some point even under a consolidated structure the challenges will remain [for regional broadcasters]," Mr Audsley said.
Mr Hartigan said Mr Catalano was "dreaming" if he thought there were material cost savings by bringing together his regional printing business with Prime, and it was doubtful the government would change rules limiting media consolidation.
"Today was to be a life raft for us, and two shareholders have hijacked that opportunity so I think it's a dreadful shame for our retail investors and a lot of our institutional [investors]," Mr Hartigan said.
Jennifer Duke is a media and telecommunications journalist for The Sydney Morning Herald and The Age.
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