Seven Net's stock dives

Talk of Stokes exploring takeover bid

By MARK WOODS

SYDNEY -- As the market digested Wednesday's dismal interim profit results, Kerry Stokes' Seven Network Australia weathered a 5% stock price plunge that wiped A$79 million ($50 million) from the value of the web.

Seven shares began trading Thursday at $3.07 on the Australian Stock Exchange, down 15-1/2¢ from its Wednesday opening. Wednesday had seen an initial 5¢ rise to $3.22, caused by news that the web would spend about $202 million on a buyback of 20% of its stock and an upward revaluation of Seven's TV licenses to $622 million from $302 million.

Those initiatives at first overshadowed a 66% slump in post-tax profit to $14 million (Daily Variety, March 10).

Talk has it

Speculation is rife that Stokes is exploring a takeover bid to move Seven into private ownership. The titan has been off-loading assets and debt for months, and if he does not give any of his Seven shares over to the buyback, his 26.4% Seven stake would rise to 33%.

Seven also clinched a pact with feevee and telephony group Cable & Wireless Optus to sell cut-price mobile telephones. The deal came after Rupert Murdoch's News Corp. and Kerry Packer's Publishing and Broadcasting committed to invest $454 million in fledgling telephony company One.Tel.

The One.Tel and Seven-Optus deals are harbingers of a wide array of future joint ventures for new services like datacasting, Internet TV and home shopping.