By Phil Boeyen, ShareChat Business News Editor
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Wednesday 31st October 2001 |
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APN, which is currently 40% owned by Mr O'Reilly's Independent News & Media, will pay for the deal with cash and the assumption of debt.
Last year Wilson & Horton had revenues of $471 million, earnings before interest and tax of $109 million and net assets of NZ$1.145 billion.
Independent says the restructuring will create one of the leading media companies in Australasia, with an expected market capitalisation of approximately A$1.5 billion.
The company says that for some time now it has been considering ways in which its Australian and New Zealand interests could be better consolidated to create a stronger platform for future and continuing growth.
It says that the increased scale of the business is likely to lead to enhanced trading liquidity, improved access to capital markets, an improved position in the relevant market indices and potential market re-rating.
"The benefits of this will flow through to Independent as the substantial shareholder and the results of the enlarged APN group will continue to be consolidated," the company says.
"APN will benefit from greater diversification in its operating base, both geographically and across product lines and consequently is expected to be a key contributor to Independent's future earnings growth."
As part of the transaction, Independent's shareholding in APN will be increased to approximately 45% of the enlarged share capital of APN.
The Deputy Chairman of APN News & Media, Ted Harris, says the acquisition is forecast to produce a significant earnings per share increase of around 18% in 2002, pre-amortisation.
The enlarged group is forecast to post combined revenue of A$999 million, earnings before interest and tax of A$222 million and net profit attributable to shareholders of A$93 million for the 2002 calendar year.
Aside from newspaper interests APN also increases its effective interest in New Zealand Radio Network from 33.3% to 66.6%.
APN plans to invite current Wilson & Horton director, Sir Wilson Whineray, and chief executive, John Sanders, to join its board.
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