Ann: Seven Network and WesTrac - Scheme Implement, page-12

re: Ann: Seven Network and WesTrac - Scheme I... From today's announcement: "Following the transaction, Seven Group Holdings will be ACE?s primary investment focus as substantially all of ACE?s economic interests will be consolidated into a single entity."

To have shareholders' interests entirely aligned with Stokes's is surely a good thing.

Also some interesting commentary from Stephen Bartholomeusz at Business Spectator:

"Seven Group would, if the deal is consummated, have strong cash flows about $300 million a year if WesTrac meets its 2011 earnings before interest, tax, depreciation and amortisation forecast of $231 million as well as no net debt of consequence and some residual cash once it pays down about $700 million of WesTrac?s $1 billion of borrowings.

If Stokes were positioning Seven for another tilt at ConsMedia, or to buy back the KKR interest in the Seven media businesses, or for some other large play ? whether in media or an unrelated sector ? it would make sense to bulk up Seven Group, add solid cash flows and increase his own shareholding to create flexibility to issue equity and debt in future without jeopardising his own control.

...

Their problem is that while they can stop the acquisition of WesTrac if they choose, Stokes could use the cash in Seven?s balance sheet to pursue other non-media deals.

In that sense, the fact that the proposal is a related-party transaction is a positive because they get to have the decisive say on whether or not the $1 billion of remaining cash is used for this particular acquisition on known and apparently favourable terms or whether Stokes just goes off and spends it on whatever takes his fancy without having to justify himself or the deal to the minorities."