KKR Exits Australia's Seven West Media; Tim Worner Promoted to Seven West CEO
SYDNEY - U.S. private equity firm Kohlberg Kravis Roberts & Co will sell its entire AUS$260 million (US$255 million) stake in Australia’s Seven West Media, ending a seven year partnership in the top rating Australian TV network, Seven West chairman Kerry Stokes announced Tuesday night Sydney time.
KKR’s announcement of its decision to divest its 12 percent stake in Seven West Media, which owns the Seven TV network here, publishing group Pacific Magazines and online joint venture Yahoo7s came just hours after Seven announced that its CEO of broadcast television, Tim Worner had been elevated to the position of CEO of Seven West Media. Worner is replacing Don de Voelte who had held the post for 12 months overseeing a restructure of the business and cost cutting.
Worner said in a conference call to media and analysts Tuesday that his main priority was the continued implementation of Seven West Media’s $100 million cost cutting plan, while “maintaining the quality of what we do."
The Nine Network this year has mounted a strong challenge to Seven’s number one market position thanks to the ongoing success of two if its key franchise, The Block and The Voice, but Seven maintains a record 40 percent share of Australia’s $4 billion TV advertising market.
''He's the right man for the job. He is an outstanding executive and has played a key role in Seven's success,'' Stokes said announcing Worner’s appointment. .
"Tim's intimate knowledge of the creation of content provides him with the experience to ensure Seven West Media's continuing success as the company evolves, grows and meets the challenges of a changing consumer market.''
Stokes said that KKR’s knowledge of Worner’s appointment meant that it was unable to sell out of Seven earlier.
In a statement he said, "KKR has been a great partner of Seven for nearly seven years. “
“We understand their decision to sell their shareholding in the company. We have worked closely together over the years in building Seven Media Group and then working together with West Australian Newspapers to create Australia's largest and best-performing media company, Seven West Media. George Roberts, Justin Reizes and the team at KKR have been excellent business partners and we regret that they have come to the conclusion of their investment”
The company “understands the pressure of funds as the term of the fund comes to an end and Australian currency pressures," he said.
KKR’s investment in Seven is at the longer end of the company’s normal 5-7 year investment plan and it had extended its shareholding through several rights issues in recent years.
KKR’s Justin Reizes said: "This decision was a tough one. KKR has been a shareholder in and partner with Seven for seven years. Seven West Media is a great company with a terrific management team and a strong future. Our decision to sell our shareholding is based on a broad range of parameters on which we based our initial investment and how we sought returns for our investors. We know Seven West Media is a great company, we know it's future is strong and we know it has a well credentialed board and management. KKR has immense respect for the Stokes family and the Seven West Media management team and believes that with Tim Worner as the newly-appointed CEO, it will remain the powerhouse in Australian media.”