Prime buys into Destra's Magna bid

Destra is fighting US film giant Lions Gate for independent DVD distributor Magna Pacific, and Prime's move to gain 15 per cent of the business puts it at the centre of the acrimonious takeover battle.

Destra's shares yesterday closed 3c higher at 31c, giving Prime a handsome paper profit after it paid 26c a share.
We believe Destra has developed a unique and highly attractive business model in the digital marketplace which will represent an important component of Prime's digital strategy in the future, Prime chairman and major shareholder Paul Ramsay said.
Destra said yesterday that the Prime deal was part of its new funding package for Magna, with the other finance coming through bank debt.

A binding agreement had also been signed with Magna, it said, and information booklets would be sent to shareholders in four weeks.
Prime's acquisition comes only a month after it offered $26million for Becker Group to expand its TV production facilities.
In early March it bought 10 per cent of Canberra's telco and pay-TV operator TransACT, and in February it acquired two Queensland regional radio stations.

Lions Gate launched a $35million offer for Magna in February at 32c a share, but Destra topped that in late March with an offer of 38c a share, or $40 million.
That prompted Lions Gate, which had already agreed to buy the 11.2 per cent of Magna owned by Macquarie Portfolio Management, to take Macquarie to court to ensure the sale proceeded.

The court sided with Lions Gate, leaving the US group in a position to block Destra's bid, which is via a scheme of arrangement that requires 75 per cent of shareholders by number to vote in favour. Lions Gate's Australian chairman Simon Franks did not expect Destra's management to be able to vote their shares.