* KKR puts 12% stake up for sale via Deutsche Bank, Goldman
* Exit comes towards end of typical investment period
By Stephen Aldred and Rob Taylor
HONG KONG/SYDNEY, May 21 U.S. private equity
firm Kohlberg Kravis Roberts & Co (KKR) is selling a remaining
stake in Australia's Seven West Media Ltd valued at
A$265 million ($260 million), exiting an investment made almost
seven years ago at the height of a buyout boom.
KKR's December 2006 deal was its first media investment in
Australia. Private equity firms typically hold their investments
for five to seven years before exiting to return any profits to
Like many media firms, Seven West has struggled to make
revenue from advertising since the financial crisis. Over the
past year, it has been on a cost-cutting drive to offset weaker
advertising revenues and adapt to tough competition.
KKR's investment in Seven Media was "net positive" a source
with direct knowledge of the matter told Reuters, meaning the
firm is unlikely to record a loss once it fully exits the stake.
The source declined to be identified as the information was not
KKR put its stake of around 12 percent up for sale
after the close of Australian stock markets on Tuesday. The sale
is being managed by Deutsche Bank and Goldman Sachs, the source
said, adding that the shares were offered at A$2.21 each, a 3.1
percent discount to Seven West's last traded price of A$2.28.
KKR has fared better in its Australian media venture than
rival firm CVC Capital, which last year crystallized a
loss of A$1.8 billion from an investment in Nine Entertainment,
the biggest ever loss in Asian private equity history.
Creditors which had acquired Nine's debt, including Apollo
Global Management and Oaktree Capital Group, took control of
Nine last year through a debt-for-equity swap.
Seven West Media went public in 2011 through a merger with
West Australian Newspapers. The group is 33 percent owned by
Seven Group Holdings, which is controlled by media
mogul Kerry Stokes.
In addition to the Seven Television network, Seven West also
owns The West Australian newspaper, 50 percent of web site
Yahoo!7, a joint venture with Yahoo, and the country's
second-largest magazine group, Pacific Magazines.
KKR's planned exit comes on the same day that Seven West
announced the appointment of Tim Worner as its new CEO.
Seven West Media said KKR had not been able to sell its
stake until the CEO appointment was made public.
KKR's other Australia investments include mining services
company BIS Industrial and aged care company Genesis Care.