Stokes Plans to Bring Revolution in Seven through Merger

Submitted by Jim Thesiger on 23 February, 2010 - 06:27

The executive chairman of Seven Network (SEV) Kerry Stokes is looking forward to achieve further strength in the corporate sector through the $3 billion worth of merger of his mining and media operations. However, Mr. Stokes will be required to convince the market that the merger is going protect the best interest of the investors. It is to be mentioned that Seven Network recently declared that it is looking forward to eliminate the gap between the value of the portfolio of media and cash investments and the share price of the company through merging with WesTrac Holdings and Caterpillar machinery dealer which are privately owned by the Seven Network executive chairman. It is to be mentioned that the merger would establish one of the largest conglomerate in Australia.

Mr. Stokes will be able to obtain 68 percent ownership of the new operation which will be named as Seven Group Holdings and will be administrated by chief lieutenant Peter Gammell if the minority shareholders approve the agreement. The decision is expected to be taken in a meeting which is scheduled to be held on April. According to the forecast, Seven Group Holdings is expected to generate $2.8 billion worth of revenue and a net profit of $187 million during the fiscal year 2011. Although Kerry Stokes will not be able to vote his 48.8 percent stake in Seven Network but still he is looking forward to convince the investors about the agreement with the help of some important factors like exposure of WesTrac to the resources boom in Western Australia and China.

According to Mr. Gammell, whether the market is being offered a satisfactory value is something that is needed to be taken under consideration. He also added that the main focus is on the utilisation of the combined strength of the two organisations to get the most out of the merger in the future.