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Seven Media-WA Newspapers' $4.1bn deal goes ahead after shareholder backlash
[Tue 12/04/2011 04:12:51]
By Sam Dallas
Despite a shareholder backlash, the country’s biggest TV and print outlet, Seven West Media, will be listed later this month after a $4.1 billion merger was finally approved by West Australian Newspapers (WAN) shareholders to acquire Seven Media Group.
A massive 36 per cent of votes cast were against the proposal – which was put forward earlier this year, as reported by IF.
About 63 per cent was cast in favour, which just got over the line after needing a minimum 50 per cent to be passed.
Negative shareholder feedback during an extraordinary general meeting in Perth was largely due to concerns about the debt levels of the merged company and that dividend payments could possibly fall.
WAN’s Doug Flynn, who chaired the meeting, reassured shareholders at the Perth meeting that dividend payments would continue after the merger was complete.
The Perth-based company will now own all of The Seven Network and a third of Sky News, while having a presence in radio, magazine and newspaper publishing, and online.
Seven Group Holdings, itself created from a Seven Network/WesTrac Group merger last year, will now own just under 30 per cent of the new company, while joint venture partner Kohlberg Kravis Roberts & Co will hold 12.6 per cent.
“Seven West Media is an important investment for SGH, enabling SGH shareholders to recognise the underlying value of their media interests,” Seven Group Holdings’ chief executive Peter Gammell said in a statement.
“Coupled with our investments in Consolidated Media and 4G broadband group vividwireless and our expanding WesTrac business, we are well-placed for future growth in two expanding sectors – media and industrial services.”
SGH and Seven West Media chairman Kerry Stokes added it would “ensure that we have a strong, local, vibrant media presence creating content for Australians in an increasingly fragmenting and competitive media landscape”.
Seven Media Group CEO David Leckie, who is currently in court over the James Warburton trial, has been appointed the CEO of Seven West Media.
Seven is currently suing Warburton for breach of contract after he left them for rival Ten, and is trying to stop him from working at another station until October, 2012.
The merger is due to be fully completed by April 21.
