West Australian Newspapers Holdings Limited ACN 053 480 845 PROPOSAL TO ACQUIRE SEVEN MEDIA GROUP EXPLANATORY MEMORANDUM INDEPENDENT EXPERT’S REPORT NOTICE OF EXTRAORDINARY GENERAL MEETING Notice is given that an Extraordinary General Meeting of Shareholders will be held at the Hyatt Regency Hotel, 99 Adelaide Terrace, Perth, Western Australia on 11 April 2011, commencing at 10am (Perth time). LEGAL ADVISER FINANCIAL ADVISER Important notices This Explanatory Memorandum is important other information made available by or on Such risks, uncertainties and other important and requires immediate attention. It should behalf of SGH during the due diligence factors include, among other things, the risks be read in its entirety before making a process conducted by WAN in connection in associated with the Proposed Transaction decision on how to vote on the Resolutions. with the Proposed Transaction. There is as set out in Section 6. Shareholders are In particular, it is important that you consider no assurance that this due diligence was cautioned not to place undue reliance on the disadvantages and potential risks conclusive and that all material issues and such forward looking statements. Deviations of the Proposed Transaction set out in risks in relation to the Proposed Transaction as to future results, performance and Section 1.3 and Section 6 and the views and SMG have been identifi ed. To the extent achievement are both normal and expected. of the Independent Expert set out in the that this information is incomplete, incorrect, Any discrepancies between totals and sums Independent Expert’s Report contained inaccurate or misleading, there is a risk of components in tables and fi gures contained in Appendix A. that the profi tability and future results of the in this Explanatory Memorandum are due operations of the Combined Group may Purpose of this Explanatory Memorandum to rounding. differ (including in a materially adverse way) This Explanatory Memorandum has from WAN’s expectations as refl ected in this Not an offer document been prepared for WAN Shareholders Explanatory Memorandum, or that additional This document is not an offer document in connection with the Extraordinary liabilities may emerge. in relation to the Entitlement Offer or the General Meeting to be held on 11 April Public Offer. You should consider the 2011. The purpose of this Explanatory Ernst & Young Transaction Advisory Prospectus, which has been sent to Memorandum is to provide WAN Services Limited (the Independent Expert) eligible WAN Shareholders, before deciding Shareholders with information that the has provided and is responsible for the whether to participate in the Entitlement Independent Directors believe to be material information contained in the Independent Offer or Public Offer. Anyone who wishes to deciding whether or not to approve the Expert’s Report. No member of the WAN to acquire WAN securities under the Resolutions detailed in the Notice of EGM Group or the SGH Group nor any of their Entitlement Offer or Public Offer will need set out in Appendix E. respective directors, offi cers, employees or advisers assumes any responsibility for the to complete the application form that will No investment advice accuracy or completeness of the information be in, or will accompany, the Prospectus. This Explanatory Memorandum has been contained in the Independent Expert’s This document is not intended to be an offer prepared without reference to the investment Report. for subscription, invitation, recommendation objectives, fi nancial situation or particular or sale with respect to any WAN securities PricewaterhouseCoopers Securities needs of any security holder or any other in any jurisdiction. Limited, (the Investigating Accountant) person. The information contained in has provided and is responsible for the Defi ned words and expressions this Explanatory Memorandum does not information contained in the Investigating Some words and expressions used in this constitute fi nancial product advice. If you are Accountant’s Report. No member of Explanatory Memorandum have defi ned in doubt as to the course you should follow, the WAN Group or the SGH Group meanings, which are explained in the you should consult your investment, taxation nor any of their respective directors, Glossary of this Explanatory Memorandum. or other professional adviser without delay. offi cers, employees or advisers assumes A reference to time in this Explanatory Responsibility for information any responsibility for the accuracy or Memorandum is to Perth time unless Other than the SMG Information, the completeness of the information contained otherwise stated. All fi nancial amounts in this Independent Expert’s Report and the in the Investigating Accountant’s Report. Explanatory Memorandum are expressed in Australian currency unless otherwise stated. Investigating Accountant’s Report, the Future performance and forward looking information contained in this Explanatory statements Enquiries Memorandum has been provided by WAN Certain statements in this Explanatory If you have any questions in relation to and is its responsibility alone. No member Memorandum relate to the future. the subject matter of this Explanatory of the SGH Group nor any of their respective Forward looking statements in the Memorandum, please contact your directors, offi cers, employees or advisers Explanatory Memorandum are not based stockbroker, accountant or other assumes any responsibility for the accuracy on historical fact but rather refl ect the current Professional adviser. If you have questions or completeness of the information provided expectations of WAN or SGH (as the case in relation to how to vote, please call the by WAN. may be) in relation to future results and WAN Seven West Proposal Information Line Seven Group Holdings Limited events. These statements may be identifi ed on the phone number set out below: (ACN 142 003 469) (SGH) has prepared, by the use of forward looking words or Within Australia: 1800 133 562 consented to the inclusion of, and is phrases such as ‘believe’, ‘aim’, ‘expect’, Outside Australia: +61 3 9415 4603 responsible for, the SMG Information. ‘anticipate’, ‘intend’, ‘foresee’, ‘likely’, ‘should’, To the maximum extent permitted by law, ‘plan’, ‘estimate’, ‘potential’ or other similar The WAN Seven West Proposal Information none of WAN nor its respective Directors, words and phrases. These forward looking Line is open from 6am to 5pm Perth time offi cers, employees or advisers assume statements are not guarantees of future (9am to 8pm Sydney time)1 Monday to any responsibility for the accuracy or performance. You should be aware that Friday until 11 April 2011. completeness of the SMG Information. known and unknown risks, uncertainties and other important factors could cause the The information about SMG that appears in actual results, performance or achievements this Explanatory Memorandum (other than to be materially different from the future 1 From 4 April 2011 the WAN Seven West Proposal the SMG Information) is based upon the results, performance or achievements Information Line will be open 7am to 5pm Perth SMG Information and from limited audited expressed or implied by such statements. time (9am to 7pm Sydney time) to refl ect the end and unaudited fi nancial information and of Australian Eastern Daylight Time. Key Dates The timetable below is indicative only and subject to change. WAN, subject to the Corporations Act, ASX Listing Rules and other applicable laws, reserves the right Table of contents to vary any of the dates below. WAN will announce all changes through ASX. Important notices Inside front cover Event Date and time Key dates 1 Proposed Transaction announced 21 February 2011 Letter from the Independent 2 Despatch of Notice of EGM and Explanatory 11 March 2011 Board Committee Memorandum Questions and answers 4 Last date and time for lodgment of proxy 10am Perth time Section 1 Proposed Transaction – 8 forms for the Extraordinary General Meeting 12pm Sydney time Advantages, disadvantages (EGM) and other relevant on 9 April 2011 considerations Time and date for determining eligibility to 10am Perth time Section 2 Summary of the Proposed 16 vote at the Extraordinary General Meeting 12pm Sydney time Transaction on 9 April 2011 Section 3 Information on WAN’s 18 existing business Extraordinary General Meeting to be held 10am Perth time 12pm Sydney time Section 4 Information on SMG 24 on 11 April 2011 Section 5 Information on the 43 Combined Group If Resolutions 1 to 4 are approved by WAN Shareholders, and all other conditions Section 6 Risk factors associated with 58 precedent to the Share Sale Agreement are satisfi ed or waived, then Completion the Proposed Transaction of the Proposed Transaction is scheduled to occur by 21 April 2011. Section 7 Additional information 63 Appendix A Independent Expert’s Report 68 Appendix B Investigating Accountant’s 177 Report Appendix C CPS Terms of Issue 183 Appendix D Explanation of Resolutions 193 Appendix E Notice of Extraordinary 196 General Meeting Appendix F Meeting and notes on voting 198 Appendix G Proxy form 199 Glossary 203 Corporate Directory Inside back cover Key Dates l 1 Letter from the Independent Board Committee 8 March 2011 WAN will raise approximately $693 million through the Offers, comprising: • $653 million from the Entitlement Offer; and Dear Shareholder, • $40 million from the Public Offer. On 21 February 2011, West Australian Newspapers Holdings Limited Details of the Offers are set out in the Prospectus which was despatched (WAN) (ASX: WAN) announced that it had agreed to acquire Seven Media to WAN Shareholders on 3 March 2011. Group (SMG) and that it proposed to conduct associated capital raisings. Proceeds from the Offers and the $461 million raised under the KKR SMG is one of Australia’s leading media groups and operates three Investment will be used to reduce SMG’s debt (including repayment key divisions: of the $650 million loan owed by SMG to SGH) and to pay transaction • Seven Network Australia’s leading FTA television network costs of $45 million.