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How Kerry Stokes' latest — and probably last — sector-shaping media deal was done

Serious talks over a small but significant deal that will alter Australian media began a month ago, and only select group of people, including the billionaire, were in the loop.

John Buckley
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The agreement, which was ultimately announced as an all-scrip merger to the market on Tuesday morning, positions Southern Cross as Seven’s acquirer in a deal that stands to reshape the Australian media sector. AAP/Lukas Coch.

The idea of some sort of deal between billionaire Kerry Stokes’ Seven West Media and Southern Cross Austereo had been kicked around by the management teams at both companies, on and off, over the last couple of years.

Seven managing director and CEO Jeff Howard and Southern Cross CEO John Kelly go back more than 15 years.

So when a February deal between Southern Cross and Australian Digital Holdings for the sale of the ASX-listed audio company’s remaining TV assets fell over at the eleventh hour, their management teams had reason to talk seriously.

By May, Southern Cross announced that it’d agreed to sell its remaining television licences to Seven. The announcement lifted the stock more than 6% that day, and triggered informal discussions between the two companies over the possibility of a more significant transaction.