SWM shareholders' big choice buried in merger fine print

Long-suffering shareholders of Kerry Stokes-controlled Seven West Media will cop a final indignity unless they stay alert during Southern Cross Media's takeover process.

SWM's 312-page scheme booklet for the proposed takeover reveals so-called small-holding shareholders must file an election form with its share registry before Christmas if they want to hang onto their newly minted Southern Cross shares.

People with less than $500 worth of shares at the end of December will have them sold by an unnamed stockbroker unless they specifically elect to stay a shareholder with the merged group.

The deadline for filing that form with the SWM share registry is Christmas Eve, two days after the target company's shareholders are due to meet to vote on the proposed friendly takeover.

The scheme booklet is full of legal definitions and cross references, with talk about the choices for "small holding shareholders" buried inside legalese about payments to ineligible foreign shareholders.

How much, if anything, someone will receive if they are forced through the exit door is unclear.

An unspecified amount of brokerage has to be paid to the broker chosen by the merger teams.  Shareholders have been warned that "other costs, taxes and charges" may have to be paid.

And it could be a lot of people paying.

SWM's 2025 annual report revealed that it had 7067 shareholders with an "unmarketable" parcel of shares when its shares closed at 15 cents. Its shares closed at 14 cents yesterday, so that figure would likely be higher.

SWM was once known as WA Newspapers.

WA Newspapers was a favourite of so-called mum-and-dad investors through 1990s and 2000s. Its shares surged beyond $10, and even survived the early stages of the internet diverting the former rivers of gold that came from classified advertising.

It had been a big payer of fully-franked dividends for two decades, making it popular with retirees.

WA Newspapers shares slid heavily after Mr Stokes backdoor-listed the wreckage of his Seven TV and Yahoo private equity play into the company in early 2011. It has never recovered.

SWM shareholder Barry Markey said he had bought 2200 shares at about $4 each three decades ago and was "not grizzling about the current price".

But Mr Markey said he was unhappy with the quality of information SWM had provided to shareholders about the merger, especially about the identity of the broker who would sell their shares post-merger and the likely fees charged.

Mr Markey said he had tried to contact SWM by phone and gone to its Osborne Park office to get more information about the proposed share sale, but had not received any information. "Someone's going to pick up a fortune if it's $50 or $60 for each parcel," the retired teacher said.

Clause 4.2 on page 27 of the SWM scheme booklet contains an explanation of the small holdings shareholder information and an email link to the SWM share registry.

SWM has been contacted for comment.