Stokes pays high price for National Hire

Seven Network chairman Kerry Stokes has paid a hefty premium over the market price for shares owned by Perth businessman Neven Botica in National Hire Group because of a 'shortfall indemnity agreement' signed in 2004.

Under the agreement, Mr Botica had the option of selling his nine million shares in National Hire to Stokes-owned WesTrac for just under 60 cents each. But because of a recent five-for-one share consolidation, Mr Botica's shares were valued at $2.97 each.

At the time of sale - December 16, 2005 - National Hire shares were trading at about $1.67, meaning Mr Stokes paid about a 78 per cent premium over the market price.

Mr Botica received the shares as part of an agreement to sell his co-owned hire and service company Allight to Stokes-controlled National Hire towards the end of 2004. The shares were escrowed until September last year.

He collected $26.7 million for the shares.