The long-awaited move by Kerry Stokes’ Seven Network Ltd on West Australian Newspapers Holdings Ltd started this week, offering all the hallmarks of a long and protracted fight.
The long-awaited move by Kerry Stokes’ Seven Network Ltd on West Australian Newspapers Holdings Ltd started this week, offering all the hallmarks of a long and protracted fight.
Mr Stokes’ camp launched an early morning assault on Monday, accusing the WAN board of lacking leadership and calling for the sacking of four non-executive directors.
Seven wants Mr Stokes and his key executive, Peter Gammell, appointed to the five-person WAN board.
WAN, led by chairman Peter Mansell, hit back, highlighting its concerns about Seven obtaining control without paying a takeover premium and the potential conflict of interest as a rival media operator.
The conflict of interest argument became even murkier when WAN issued a statement spelling out its dealings with Seven.
WAN said it had written to Mr Gammell in December raising several issues, including arrangements that appeared to oblige Seven to present potential media acquisitions or investment opportunities to its joint-venture partners.
WAN said Mr Gammell had not responded to those issues, though Seven has since claimed concerns about its conflict of interest were without foundation.
However, there were counter accusations that WAN had its own conflict of interest issues with regard to director Jenny Seabrook’s role as an executive of corporate advisory firm Gresham.
Gresham has been a long-running adviser of WAN and has also been given the mandate to advise the board on the Seven requisition, along with another investment bank, Goldman Sachs.
Ms Seabrook and Mr Mansell both acknowledged there was a conflict of interest but said there were protocols in place which meant she played no role in discussions regarding Gresham.
In addition, WAN matters were handled by Michael Ashforth at Gresham where Ms Seabrook recently stood down as a director as part of a move to reduce her time at the advisory business.
“I have very high standards in terms of conflicts,” Ms Seabrook said.
“I am aware I am easy target.
“In the end, we have a job to do as directors. If the shareholders don’t want us to be there they can make a choice.”
Mr Mansell said the major issue for the board was simply about whether Seven gained control without paying a premium and whether or not it would be in the longer-term best interests of shareholders to cede effective control.
“From my point of view there are very few real issues in this,” he said.
Mr Mansell also defended WAN’s financial performance, which he said had been very strong over the longer term.
A 10-year comparison of share prices shows the two companies running neck and neck since 2003, though Seven has outperformed in recent months as takeover speculation for WAN has dwindled.
A WAN source claimed the publisher’s total shareholder return, assuming dividend reinvestment, had been 15 per cent over the past 10 years, ahead of Seven’s 13.1 per cent and the ASX 200’s 12.4 per cent over the same period.
In writing to shareholders, Mr Mansell described Seven’s move as opportunistic, coming at a time when major investments in printing presses would result in long-term financial gains for the company.
