The four non-executive directors of West Australian Newspapers sealed their fate over the weekend with a bizarre suicide pact to resign en masse if Channel Seven controlling shareholder Kerry Stokes gets elected to the board at the EGM on April 23 (the notice of meeting was released at 11.30am this morning).
Whilst trading on the ASX continues without formal confirmation of this tactic, today’s press reports were emphatic and quoted the gang of four, led by chairman Peter Mansell, as follows:
We will not serve with them – even if shareholders do not vote to remove us. Taking into account past communications between Mr Stokes and the board, we believe it would be impossible for us to work constructively with Mr Stokes to advance the interests of all WAN shareholders.
It is hard to recall a more belligerent or obstinate establishment board. First, they have completely ignored a chorus of complaints, including numerous adverse Press Council findings, about the chaotic and bull-headed editor of The West Australian, Paul Armstrong.
Editorial independence is one thing, but to then completely reject the idea that a billionaire media mogul is entitled to a board seat on becoming the largest shareholder, was just ridiculous.
Kerry Stokes was left with no option but to put his wishes direct to the shareholders and now the board has said they will completely ignore the will of the majority and collectively pull the plug if Stokes is embraced, as he should be.
Stokes has today revealed the powerful arguments he’s using against the board on the www.refreshthewest.com.au website, but the formal documents for the meeting are yet to surface as promised before our publishing deadline.
It is now absolutely set in stone that Stokes will vote Seven’s 20% stake against all the incumbents. The only remaining issue is whether he will hand pick two of the other nine candidates, or leave that to the neutral shareholders. Steve Harris, the former editor in chief of the Herald & Weekly Times and publisher/editor in chief of The Age is the standout external candidate.
WAN shares today hit $10 for the first time since October 2006 so don’t be surprised if Seven uses the creep provisions of the takeovers code to lift its stake to 23% before voting day.
While reportedly censoring the platforms of some candidates, the WAN board has been spending company funds engaging all manner of advisers including two law firms, Cochrane Lishman and Blake Dawson, and two investment banks, Gresham and Goldman Sachs.
The use of Gresham is just outrageous given WAN director Jenny Seabrook is an executive at the Wesfarmers controlled firm.
Check out this Mayne Report package of WAN developments including the ABC Perth interview Steve Harris did last Thursday.