Prime Media : ASX Announcement - Prime and Seven West Media Limited

ASX statement

Prime and Seven West Media Limited enter into Scheme Implementation Deed

18 October 2019: Prime Media Group Limited (ASX: PRT) (Prime) and Seven West Media Limited

(ASX: SWM) (Seven) today announced that the companies have entered into a binding Scheme Implementation Deed (the Scheme Implementation Deed) under which it is proposed that SWM will acquire all of Prime's issued shares by way of a scheme of arrangement (Scheme).

Prime shareholders will receive 0.4582 SWM shares for each Prime share they hold (Proposed Transaction). Following the completion of the Proposed Transaction, existing SWM shareholders will own 90% of the combined entity, with Prime shareholders owning the remaining 10%.

The Scheme:

• establishes the merged entity as the leading wholly-owned commercial premium broadcast, video and news network in the country with potential to reach over 90 per cent of Australia's population each month and providing seamless access for advertisers;
• is expected to generate significant synergies and to be EPS accretive for all Prime and SWM shareholders on a pro forma basis following the realisation of expected cost synergies of A$11 million on an annualised basis - excluding any one-off transaction and integration costs; and
• provides Prime shareholders with the opportunity to maintain industry exposure while benefiting from participation in a scaled media organisation and also sharing in the upside from the synergies gained.

Prime Board unanimously recommends the Scheme

The Prime Board of Directors unanimously recommends that Prime shareholders vote in favour of the Scheme in the absence of a superior proposal and subject to an independent expert concluding that the Scheme is in the best interest of Prime shareholders. Subject to those same qualifications, each Prime director has indicated that he or she intends to vote all Prime shares held or controlled by them in favour of the Scheme.

The Proposed Transaction is to be implemented by way of a Scheme of Arrangement requiring the approval of Prime shareholders at an Extraordinary General Meeting, which is expected to be held mid December 2019.

PRIME MEDIA GROUP LIMITED ABN 97 000 764 867

Suite 132, Jones Bay Wharf, 26-32 Pirrama Road, Pyrmont NSW 2009

www.primemedia.com.au

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Prime's Chairman John Hartigan commented: "The Prime Board has carefully considered the Proposed Transaction and believes it is in the best interests of Prime shareholders. It represents an exciting opportunity for Prime shareholders to maintain their exposure to the broadcast television industry in a stronger and larger combined group.

The combined entity will unlock significant value for shareholders and provide a compelling opportunity to grow both businesses into the future. Prime and Seven have highly complementary businesses which are operating in a rapidly evolving market. Bringing these businesses together makes perfect sense from a strategic and value viewpoint".

Prime Chief Executive officer Ian Audsley said: "Only scaled media companies have the capacity to compete with the international tech giants now changing the game in Australian media. Small regional media companies like Prime are unable to achieve scale independently. The proposed merger with Seven provides Prime shareholders with opportunity to invest in a scaled media company".

Details of the Scheme Implementation Deed

The implementation of the Scheme remains subject to certain conditions, including:

• the independent expert concluding that the Scheme is in the best interest of Prime shareholders;
• Prime shareholder approval;
• Court approval;
• regulatory approvals (including approval by the Australian Competition and Consumer Commission and the Australian Communications and Media Authority); and
• no Prime Prescribed Occurrence, Prime Regulated Event, Seven Prescribed Occurrence or Seven Regulated Event (each as defined in the Scheme Implementation Deed).

The Scheme is not subject to due diligence.

Prime is bound by customary exclusivity provisions included in the Scheme Implementation Deed, including "no shop", "no talk", "notification and "matching" obligations. The "no talk" obligation is subject to a customary fiduciary carve out.

Prime and Seven are each subject to an obligation to pay a break fee to the other in certain circumstances (including where the Scheme Implementation Deed is terminated for a material breach).

A fully copy of the Scheme Implementation Deed, including all applicable conditions, is attached to this announcement.

PRIME MEDIA GROUP LIMITED ABN 97 000 764 867

Suite 132, Jones Bay Wharf, 26-32 Pirrama Road, Pyrmont NSW 2009

www.primemedia.com.au

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Indicative Timetable and next steps

It is anticipated that Prime will issue a Scheme booklet containing information relating to the Scheme and the reasons its Directors recommend it to shareholders in November 2019 and that Prime shareholders will meet to vote on the Scheme in mid December 2019.

Subject to timely receipt of necessary approvals, Prime and Seven expect the Proposed Transaction to be implemented in January 2020.

Media inquiries

Miche Paterson, Newgate Communications 0400 353 762

Investor inquiries

John Palisi, Chief Financial Officer [phone]

PRIME MEDIA GROUP LIMITED ABN 97 000 764 867

Suite 132, Jones Bay Wharf, 26-32 Pirrama Road, Pyrmont NSW 2009

www.primemedia.com.au

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Deed

EXECUTION VERSION

Scheme implementation deed

Seven West Media Limited

Prime Media Group Limited

ANZ Tower 161 Castlereagh Street Sydney NSW 2000 Australia	T [phone] F [phone]
GPO Box 4227 Sydney NSW 2001 Australia	herbertsmithfreehills.com DX 361 Sydney

		Contents
	Table of contents
1	Definitions and interpretation	2
	1.1	Definitions ..................................................................................................................	2
	1.2	Interpretation ..............................................................................................................	2
	1.3	Deed components......................................................................................................	2
2	Agreement to proceed with the Transaction	2
3	Conditions Precedent and pre-implementation steps	2
	3.1	Conditions Precedent ................................................................................................	2
	3.2	Reasonable endeavours ............................................................................................	4
	3.3	Waiver of Conditions Precedent ................................................................................	7
	3.4	Termination on failure of Condition Precedent ..........................................................	7
	3.5	Certain notices relating to Conditions Precedent ......................................................	9
4	Transaction steps	9
	4.1	Scheme......................................................................................................................	9
	4.2	No amendment to the Scheme without consent ........................................................	9
	4.3	Scheme Consideration ..............................................................................................	9
	4.4	Provision of Prime Share information ......................................................................	10
5	Implementation	10
	5.1	Timetable .................................................................................................................	10
	5.2	Prime's obligations...................................................................................................	10
	5.3	Seven's obligations ..................................................................................................	13
	5.4	Prime Board recommendation .................................................................................	15
	5.5	Conduct of Court proceedings .................................................................................	15
	5.6	Scheme Booklet content and responsibility statements ..........................................	16
6	Conduct of business and access	16
	6.1	Conduct of business ................................................................................................	16
	6.2	Access .....................................................................................................................	18
7	Representations and warranties	20
	7.1	Seven's representations and warranties .................................................................	20
	7.2	Seven's indemnity....................................................................................................	20
	7.3	Prime's representations and warranties ..................................................................	20
	7.4	Prime's indemnity.....................................................................................................	20
	7.5	Qualifications on Seven's representations, warranties and indemnities .................	20
	7.6	Qualifications on Prime's representations, warranties and indemnities ..................	20
	7.7	Survival of representations and warranties .............................................................	21
	7.8	Survival of indemnities .............................................................................................	21
	7.9	Timing of representations and warranties ...............................................................	21
	7.10	No representation or reliance ..................................................................................	21
8	Releases	22
	8.1	Prime and Prime directors and officers....................................................................	22
	8.2	Seven and Seven directors and officers ..................................................................	22
	8.3	Deeds of indemnity and insurance ..........................................................................	23

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Printed 14/08/17 (12:34)

Scheme implementation deed

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