Citi analyst Justin Diddams says a Seven West Media and Fairfax Media merger could carry $125 million in cost savings by removing corporate costs, adding scale...

Livewire
Citi analyst Justin Diddams says a Seven West Media and Fairfax Media merger could carry $125 million in cost savings by removing corporate costs, adding scale and integrating sales functions. Diddams wrote that there was renewed interest in M&A activity across the market, while media bosses have been meeting with Communications Minister Malcolm Turnbull to discuss potential ownership law changes. With this background, we view a merger between SWM and FXJ as a credible transaction in the media sector, achievable with (or without) regulatory reforms and we view SWM driving the process, backed by majority shareholder in SVW, Diddams told clients in a speculative note on Friday in response to considerable investor demand for information about the benefits or otherwise of various potential tie-ups. Diddams says the tie up would create what he argues will be the largest Australian listed media company by revenue. (VIEW LINK)
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