West Australian Newspaper Holdings Ltd has hit back at criticism by Seven Network Ltd chairman Kerry Stokes, calling the move to oust WAN directors an attempt by Seven to wrestle control of the company without paying an appropriate premium for it.
West Australian Newspaper Holdings Ltd has hit back at criticism by Seven Network Ltd chairman Kerry Stokes, calling the move to oust WAN directors an attempt by Seven to wrestle control of the company without paying an appropriate premium for it.
Mr Stokes called for an extraordinary meeting yesterday to vote on resolutions to dismiss the board, saying it had been appalled at the lack of leadership of the board and the resulting performance of the company.
Seven, which holds 19.40 per cent of WAN, plans to nominate Mr Stokes and Seven board director Peter Gammell to fill two director positions on the five-member board.
In a letter to shareholders today, WAN chairman Peter Mansell said statements made by Seven and Mr Stokes about the performance of the company were "opportunistic and without foundation".
Mr Mansell said it was asked late last year to appoint Mr Stokes and Mr Gammell to the WAN board and was told that Seven was fully supportive of the current board and management.
"We had a number of concerns about appointing representatives of Seven to the WAN board, particularly because WAN and Seven are direct competitors in Western Australia - in advertising, promotion, recruitment of people, on-line and in competing for media assets," Mr Mansell said.
"We raised our concerns in writing in mid December. We have not had a response. We can only conclude that, faced with the prospect that the board would not accede to its request, and with no attempt to address the concerns we had raised in our letter, Seven has now moved to solve the problem by seeking the removal of all of the directors who currently stand in its way."
Mr Mansell said WAN's underlying business performance was strong and the company remained well-positioned for future earnings growth.
"The criticism levelled at WAN's performance glosses over the fact that WAN has recently made a large and long term investment in the company's future by upgrading the presses at Herdsman. The value of that significant investment is about to be reflected in improved operating and financial performance," he said.
"The criticism also focuses on a single half yearly result and ignores WAN's long term track record of generating significant shareholder returns."
Mr Mansell said it was in the process of preparing a notice of meeting, which it would send to shareholders within the next three weeks.
Weighing into the debate today, premier Alan Carpenter told journalists he did not believe there would be a conflict of interest if Mr Stokes and Mr Gammell sat on the WAN board.
Mr Carpenter said yesterday's phone call from Mr Stokes about his plan to dismiss the board was simply a "courtesy".
Mr Stokes also called WA attorney-general Jim McGinty to inform him of his intentions.
"If Kerry Stokes gains control of The West Australian newspaper and that means that results in a better newspaper, well obviously that's a good thing," Mr Carpenter said.
"And I am confident that it would, because at the moment The West Australian newspaper is at a very low ebb.
"What's affecting The West Australian newspaper is the poor performance of its management and its editor. All the world knows it."
Mr McGinty's relations with The West Australian, published by WAN, are so poor he has stopped sending WA's only daily newspaper text and other alerts of his media events.
Mr Carpenter said there was nothing untoward in the phone call from Mr Stokes, and he received many calls from business leaders.
"It was completely, I thought, appropriate for Kerry Stokes to notify me of what he's intending," Mr Carpenter told reporters.
"This is an issue that will affect Western Australia, it affects our daily newspaper. Kerry Stokes, I think, was providing me with the courtesy of informing me of his intentions, and that's all he did."
Mr Carpenter has denied he discussed editorial issues with Mr Stokes.
Last week, WAN reported a 21.2 per cent slide in first half net profit to $44.25 million and cut its interim dividend by about 30 per cent.
