Seven West Media is proposing to buy regional TV broadcaster Prime in a deal worth $131.9 million.
The two companies have reached conditional agreement for a combined business which would reach 90 per cent of Australians.
Seven boss James Warburton said Seven would be able to give advertisers easy access to capital city and regional viewers via a single platform.
Prime broadcasts in the ACT, Victoria, the Gold Coast, parts of NSW and all of Western Australia. It has for many years screened Seven programs.
However the regional broadcaster's audience and ad sales have been falling and its leaders were keen for the proposal to go ahead.
A Seven takeover would also ensure regional news services continue.
The Prime board will recommend shareholders vote for the proposal at an extraordinary general meeting next month.
Prime investors who own 43.5 per cent of stock have already indicated they will vote for the proposal.
The Australian Competition and Consumer Commission must also approve the takeover. The competition watchdog has previously been concerned about the concentration of Australia's media outlets.
The value of the Seven West bid is based on the closing price of Prime shares on October 29 of 23 cents per share.
Prime said should investors vote for the proposal, they could expect a distribution of 36 cents per share. This would include a 10 cent capital return and 26 cent fully franked dividend.
Shares in Seven West on the ASX were up 12.09 per cent to 51 cents at 1415 AEDT.
Shares in Prime were up almost 71.74 per cent to 39 cents.
