More bad news for the struggling Seven West Media – its attempts to sell its unwanted Pacific Magazines business to Bauer, the local arm of the German publishing giant.
The settlement date for the latest attempt to complete sale is Friday, May 1 after Bauer missed a deadline of Aril 9.
That is now in doubt following news that the German group is sacking or standing down around 140 local staff and suspending publication of an unknown number of publications because of the collapse in ad revenues caused by the COVID-19 pandemic and lockdown.
Bauer Media says 70 staff will be made redundant and a similar number stood down as advertising revenue falls due to the coronavirus crisis.
Bauer did not name the titles but their digital assets will continue to operate. The decision to resume print publication will be made once the trading environment improves.
Media reports said Bauer CEO Brendon Hill told staff today: “These are unprecedented times. The COVID-19 crisis and the strict measures being taken to control it are having a profound impact on the Australian economy and any business that operates in it.
“This has led to a sharp decrease in advertising revenues in Australia over the short term and we have had to reshape our organisation accordingly.”
Seven and Bauer are still talking about the purchase of Pacific – but the price? The original figure was $40 million. Bauer did not complete the deal before Easter as it was supposed to do. It and Seven argued, Seven threatened court action, talks continued, no deal, so far.
After this news from Bauer, Seven looks like being left holding the Pac Mags hot potato. No $40 million. Bauer can plead hardship – and Pacific must be feeling the pain as well.
Seven West shares remain around 8.4 cents – derisory – and all that debt. The mooted $95 million offer for the Perth HQ won’t make a dent in more than $600 million of debt, it will still be there, rising as the revenue slide continues.