We'll Buy You Out, Prime Tells Reading

Sydney Morning Herald

Saturday October 25, 2008

Miriam Steffens

PAUL RAMSAY'S Prime Media Group has offered to buy out the US cinema operator Reading from the former Becker Group's TV production and outside broadcasting services for about $8.5 million.

Prime, which already owns 76 per cent of the renamed Broadcast Production Services, will pay the other shareholders 0.257 new Prime shares for every share they hold, or about 55c a share. The step would finalise the takeover of Broadcast Production, which has been controlled by Prime since it acquired a majority stake in Becker Group in July last year. It will allow Mr Ramsay to delist the business from the stock exchange.

Reading owns 19.7 per cent in Broadcast Production, having acquired the stake last year to get a seat at the table in negotiations to buy the art-house cinema chain Dendy, which Prime decided to sell. The cinemas were snatched in February by Mel Gibson's Icon Film Distribution for $21 million.

Robert Reeve, a spokesman for Broadcast Production, said Prime hadn't yet spoken to Reading but suspected it might not be interested in the shares any more, having missed out on the Dendy sale.

Broadcast Production's shares jumped 5c, or 17 per cent, to 35c yesterday, well below the offer price. Prime's stock dropped 12c to $2, having fallen 44 per cent this year.

Prime has been weighed down by problems at Destra, the struggling digital media company of which it owns 44 per cent. Destra said yesterday Prime agreed to give it a $2.2 million short-term loan to stay afloat.

© 2008 Sydney Morning Herald

Back to News Index | Back to Home