SEVEN WEST MEDIA Kerry Stokes annual general meeting
Seven West Media chairman Kerry Stokes (Image: AAP/David Moir).

Well, who got a taste for Seven West Media shares last week? Something seems to be happening at Kerry Stokes’ rejuvenated media arm the way the share price soared (on top of an already mighty run up in recent months) and turnover which surged to the highest weekly level this year. 

This suggests there’s a deal in the offing, or even a marriage. Could Kerry and Rupert be about to post the banns on a relationship after Nine’s bid for Fairfax Media?

We should have an idea tomorrow as to why the Seven West shares have rallied like a tech stock this year, with the company due to release its 2017-18 results. Something must be on because the company’s shares have enjoyed a massive rally since hitting a low of 51 cents in February, with the share price more than double at $1.05 on Friday.

That alone was an 8.7% gain on the day and 14% for the week — and not a query about why the share price has risen faster than the ASX 200, which is up a mere 4.5% in comparison. Seven’s value has more than doubled in 2018 to over $1.4 billion, helping repair the damage to Kerry Stokes’ fortune (he owns 41% of the stock).

Last week’s price surge was accompanied by the heaviest weekly trading in the shares this year — Tuesday (12.57 million shares), Wednesday (8.22 million) and Friday (13.19 million), for a total of nearly 34 million shares in those three days and over 37 million for the week to Friday. Those volumes went unremarked upon by the ASX or any other watch poodle. It is also interesting that these volumes have not seen any filings with the ASX about changes in substantial shareholdings. That looks like well-informed buying.

The best bets are that Seven will show an improved profit, lower debt and even a promise to resume dividends which were suspended in February’s interim profit statement when Seven CEO, Tim Worner committed the company to cutting its debt from $711 million at the end of last December to at least $650 million by June 30. The suspended dividends were to be used to pay down debt. Seven also promised to cut costs by $125 million by June 30 next year and it wouldn’t surprise that it is doing better than that.

There are also rumours that Seven’s Pacific Magazines and Bauer could link up in a cost sharing deal or, failing that, Seven could link with the faltering magazines business of News Corp. After the printing and distribution deal done between Fairfax and News, a magazine sharing deal would not surprise. There is also a belief that the slide in TV revenues has slowed sharply in the six months to December. But this is all supposition. With no change to guidance by Seven since the interim results, the improvements claimed by some analysts must not be “material”.