Seven West Media has finally sealed the sale of its 50% interest in Yahoo7 to Verizon Media (formerly Yahoo, and then Oath) at a significant loss to book value.
The sale was first announced on March 28, 2018, but lingered as both parties couldn’t agree on a price for the sale and then went into months of arbitration and further negotiations.
Seven said yesterday it will receive $20.75 million in cash for its shares this financial year, now fully owns and operates all of it’s direct to consumer’ digital products.
The market cheered that cash news from Seven, sending the shares up more than 7% to a high of 51.7 cents. The closed up more than 6% at 51.5 cents.
The sale price compares to the book value of more than $36 million.
In the December 2018 accounts in Note 16 Seven West said it had put a “fair value” of $36.1 million on the 50% of Yahoo7 it was then still trying to sell to Verizon.
The $20.6 million figure is a long way from the $201 million Seven had its 50% in its accounts in 2015-16.
Write-downs in early 2017 at the instigation of corporate regulator, ASIC, saw a big cut in the value of the 50% of Yahoo7
The joint venture was created in 2006, a major play between then global business, Yahoo, and Seven Network. Seven West Media continued the joint venture when it was created in 2011 from the merger of Seven Network and West Australian Newspapers – two companies effectively controlled by Kerry Stokes.
Now Seven is master of its own destiny in online news and content for its own programming. That saw 7NEWS.com.au launched last week – finally.