Antony Catalano and Alex Waislitz’ hopes of acquiring Prime Media appear to have been dashed with a conditional agreement announced by Seven West Media to acquire the regional broadcaster.

The duo – who own Australian Community Media – recently increased their stake in Prime to 22.9 per cent through WA Chess Investments.

Seven West has announced it has entered into a conditional share sale agreement to acquire Prime Media Group’s businesses and related assets for $131.9 million, subject to the approval of shareholders in December.

Kerry Stokes’ Seven argues that the combined business would create “the leading wholly-owned commercial premium broadcast, video and news network across Australia”, reaching more than 90 per cent of the country’s population every month.

Managing director and chief executive James Warburton says the proposal is an “important step forward” for both companies following a long and successful relationship. “Together, they will offer the best content for our national audience and unmatchable premium revenue opportunities for our clients.”

Warburton calls the proposed transaction an “exciting and transformative” development for advertisers and media buyers. “It means we will be able to give advertisers easy and seamless access via a single platform to capital city and regional markets.”

The bid price of $131.9 million is a 57 per cent premium on Prime’s closing share price of October 29, with the deal expected to see Prime with approximately $10 million cash on hand “with the balance of PRT’s cash held in various subsidiaries to be acquired by SWM”.

“On this basis SWM would pay PRT $121.9 million on completion”, and PRT would be able to distribute net cash on hand to shareholders via a combination of franked dividends or capital return.

SWM’s share of the expected PRT distributions is expected to be approximately $72 million, “excluding transaction costs, and SWM’s net investment in the PRT business”.

Seven West refinanced its existing $500 million syndicated facility agreement on Friday with a new $600 million deal underwritten by ANZ and Westpac designed to facilitate the Prime acquisition.

Seven says the acquisition will provide advertisers with a single platform delivering superior audience reach across metropolitan and regional markets, unlock revenue potential of the combined metropolitan and regional audience base across broadcast and digital platforms, and enhance the audience proposition through re-investment in content and expanded digital delivery.

Estimated cost synergies of $5 million to $10 million on an annualised basis are expected, with savings fully realised within 12-18 months.

A revenue upside is also expected but “has not been quantified”.