Ireland's Independent News backs APN board to grow shareholder value

Friday 12th September 2014

Irish media group Independent News & Media is backing the board of APN News & Media to grow shareholder value, as the Australasian publisher and broadcaster considers carving out its New Zealand unit.

The Dublin-based company, which is controlled by Irish billionaire Dennis O'Brien, will support any moves by APN to increase the value of its 18.6 percent stake in the trans-Tasman media company, the most recent initiative being the possible sell-down and float of its New Zealand businesses, including the New Zealand Herald newspaper and The Radio Network.

"The company is supportive of anything that the APN board is considering that has the potential to create value for its shareholders," INM said in an emailed statement.

APN estimates an initial public offer of 60 percent of APN New Zealand would generate some A$308.6 million of gross proceeds, based on the carrying value of the unit. Of that, some A$169.4 million would be raised through the float, and a further NZ$150 million from a ‘note payable’ as a result of restructuring the New Zealand unit.

The funds raised would repay A$241.6 million of APN debt, and A$67.1 million would be added to the media group’s cash holdings.

Independent News had its APN stake diluted in a A$112 million rights issue, which the Australian company used to buy out its partner in its radio businesses. The Irish company's entitlement in the issue was taken up by O'Brien who kept his total interest at 30.8 percent.

The Irish company and fellow APN shareholder Allan Gray Australia forced a board-room shake-out of the Australian media group last year after baulking at APN’s plans to raise capital to shore up its own debt-plagued books.

APN had net debt of A$482.6 million as at June 30, and renegotiated a new A$630 million banking facility in August which sees its next major maturity in January 2018. The media group plans an early redemption for $100 million of NZX-listed bonds, and yesterday scotched plans to raise US$250 million of bonds from US investors after failing to settle on the terms and conditions for the notes.

The dual-listed shares of APN were unchanged at 92 cents on the NZX, and last traded at 83 Australian cents on the ASX. The stock has almost doubled on both bourses this year.

BusinessDesk.co.nz

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