Seven West Media-Southern Cross Media merger: Shareholders approve media deal with 99 per cent vote

Shareholders in Seven West Media, the owner of the Seven television network, the West Australian newspaper and The Nightly, today overwhelmingly voted in favour of a merger with the company behind the Triple M radio network, Southern Cross Media Group.

Ninety-nine per cent of shares cast supported the $385 million deal, which will go to the New South Wales Supreme Court for approval on Tuesday and come into effect on January 7, according to Seven West Media.

The size of the vote demonstrates that Seven shareholders, led by chairman Kerry Stokes, believe a larger business with exposure to the fast-growing podcast field - Southern Cross owns the popular LiSTNR online audio service - will provide greater financial stability at a time when streaming services such as Netflix are putting conventional television stations under pressure.

Mr Stokes gave a short speech by video link then handed over to son and fellow director Ryan Stokes, who oversaw the vote at Seven’s headquarters in Sydney.

“It’s a somewhat momentous day in Seven’s history - the conclusion of one chapter and the exciting stage of another,” Ryan Stokes told The Nightly after the 14-minute meeting finished. “We become a much larger, stronger and better-positioned media company and that only bodes well for the journey going forwards.”

Although Southern Cross Media is legally buying Seven West Media, the scrip-based transaction will result in shareholders of both companies ending up with about 50 per cent of the combined company.

Until a new name is chosen next year, the business will be called Southern Cross Media and trade on the stock exchange under the SXL ticker.

The merged business will own 104 radio stations, a national TV network, a national online newspaper and newspapers across Western Australia. Annual revenue will be about $1.96 billion and operating profit $233 million, according to Seven West Media’s chief executive officer, Jeff Howard, who has been chosen as the new company’s CEO.

Seven chairman and founder Kerry Stokes will step down as chairman February 26 and be replaced by Southern Cross chairman Heith Mackay-Cruise.

The Stokes family will be represented on the board by Ryan Stokes, the chief executive of SGH, an industrials conglomerate that will hold 20 per cent of Southern Cross Media.

Southern Cross investors were not required to vote on the deal.