ASIC is forcing Seven Network Ltd
(ASX:SEV) to make major changes to documents it will distribute to shareholders about the proposed merger with earth-moving business WesTrac.
The Sydney Morning Herald reports that the corporate regulator is concerned the documents Seven wants to send do not give shareholders sufficient information about the merger.
Documents tabled in the Federal Court last week during Seven’s efforts to convene a shareholder meeting to approve the merger contain nearly 100 pages of correspondence between ASIC lawyers and Seven.
ASIC’s concerns with the documents include unclear disclosure that the transaction involves a related party and details that the combined business would cost $5 million more a year to run.
Seven Network announced plans to merge its television and earth moving interests last month.
Chairman Kerry Stokes would control 68% of the merged company, to be known as Seven Group Holdings, which would use $600 million in cash from Seven to pay down WesTrac debt.
In the 12 months to June 30, 2009, Seven booked a profit of $12.49 million.
