West Australian Newspaper Holdings (WAN.AX) (WAN) shares fell more than 11 percent when the stock resumed trading after announcing a $2 billion tie-up with Seven Media Group and completing share sales to institutions to help fund the deal.
Shares in the Perth-based newspaper group were trading 11.4 percent lower at A$5.62 in early trade compared to a 0.4 percent decline in the broader market .AXJO.
WAN on Monday agreed to buy Seven Media Group from Seven Group Holdings (SVW.AX) and private equity firm Kohlberg Kravis Roberts (KKR.N) in a deal which creates Australia's biggest media company.
WAN is raising A$1.08 billion in new capital to fund the deal which is being driven by media tycoon Kerry Stokes who owns major stakes in WAN and Seven Media.
Seven Group Holdings shares rose on news of the deal initially. The stock was 0.8 percent lower at A$8.95 on Wednesday.
WAN shares resumed trading on Wednesday after raising A$325 million from the institutional component of its entitlement offer. It said the offer was well supported by WAN's existing institutional shareholders who subscribed for 90 percent of their entitlements.
The retail component of the offer opens on March 3.
The takeover, which consolidates Stokes' Australian newspaper, television and online assets, is the latest in an expected string of media deals ahead of consolidation.