ARN Media raid straight from the Kerry Stokes playbook

Seven West Media chairman Kerry Stokes. Picture: NCA NewsWire / Martin Ollman

The move by Seven West Media to buy up shares in ARN Media leaves some wondering if its chairman, Kerry Stokes, will apply the same formula he has used to win over his targets in the past without having to pay up.

In 2011, Seven West Media gained control of West Australia Media Holdings, publisher of The West Australian, after a number of efforts to gain boardroom control.

With a 19.9 per cent stake amassed in ARN Media, expectations are that Seven West would be entitled to gain a seat on the board of the radio broadcaster of KIIS and Pure Gold stations that count stars Kyle and Jackie O within its stable.

Yet the Kerry Stokes-chaired Seven West may pass up the opportunity if it restricts its ability to trade ARN, given the inside knowledge that would prohibit it from doing so.

But if Mr Stokes’s battle to gain control of the West Australian newspaper empire is anything to go by, another possibility is that he tries for two director positions in the boardroom.

In the traditional radio sector, some believe there’s more upside in Southern Cross Media than ARN Media, so if the thinking is the latter is well run, the WA billionaire may refrain from aggressive tactics to install his own people to boost performance.

Yet that wasn’t the way things played out more than a decade ago with WA publisher West Australia Media Holdings.

The company initially pushed back on his request for two directors. Then, in typical Stokes style, he crept up the register to gain close to 30 per cent.

Then he launched an extraordinary general meeting to oust the board.

While that move did not result in the desired outcome, he eventually got his target.

In 2011, the company became his in a reverse takeover, where the West Australia Media Holdings bought Seven Media Group with Kohlberg Kravis Roberts, which later sold its 12 per cent stake in the business.

It was a similar situation decades ago when Mr Stokes gained control of the Seven Network, which now forms the bulk of Seven West Media.

First Mr Stokes bought shares in the company, then gradually crept up the register. He agitated for boardroom representation and, despite facing opposition from the chairman, shareholders supported his plan.

Mr Stokes will not be sitting on his hands in the ARN Media battle. And he rarely comes off second best.

One only needs to look at how he played his hand with the acquisition through Seven Group Holdings of building materials provider Boral.

Seven was able to eventually gain control of the company at an opportunistic price by creeping up the register then launching a takeover bid without a control premium.