The Seven Network Ltd
(ASX:SEV) has agreed to accelerate the renewal of its board and take a $130 million hit if mining and industrial equipment company WesTrac does not meet its profit forecast.
The developments have swayed key shareholders in Seven, Ausbil Dexia and Perennial Value who yesterday confirmed their support for the merger.
Kerry Stokes says he will forfeit 15 million Seven shares if WesTrac does not achieve its targeted 2011 earnings.
Mr Stokes says WesTrac is a great company with excellent management opportunities for growth and being extremely confident about its prospects, he says he is happy to demonstrate that level of confidence by standing by WesTrac’s future earnings.
The merger is gaining support, with institutional shareholders Mackenzie Cundill and White Funds Management also throwing their support behind the deal.
Last week Riskmetrics and CGI Glass Lewis recommended that their institutional clients vote against the deal on corporate governance and valuation concerns.
If the merger is approved by shareholders Mr Stokes will hold a 66% stake in the combines group, but this will be reduced if WesTrac fails to meet its earnings guidance of $230 million profit for fiscal 2011.
Seven Network earned a profit for the 2009
