Conflicting approaches to the online world yesterday from two major local media companies.
Fairfax Media revealed a $29 million deal to take it further into the online tourism and accommodation (see next story), but Nine Entertainment has quit its 49.1% stake in carsales.com for $565 million in a debt cutting move.
The deal raised questions about whether the mooted float of Nine later this year will now take place.
Analysts said the sale eases the need for Nine Entertainment’s private equity owner CVC Asia Pacific to go ahead with the float, which some claimed could be worth $5 billion, including debt.
The Carsales stake was sold through UBS to institutional investors at $4.92 a share, a 6% to carsales.com’s last sale last Friday.
Carsales shares fell 24c, or 4.6%, to $5.00 after the deal was done.
Carsales said that non-executive directors Graham Brooke, David Gyngell and Adrian Mackenzie had all resigned from the company as a result of the sale.
Carsales managing director Greg Roebuck said Nine Entertainment’s exit would not affect normal operations of the website.
"At an operational level, the ties between carsales, ACP Magazines and Nine Entertainment have been minimal will all commercial arrangements held at arms’ length," Mr Roebuck said in statement to the stock exchange. "We expect it to be business as usual."
CVC has appointed Credit Suisse, Goldman Sachs and UBS to advise on the possible IPO of Nine Entertainment, with a second half issue suggested.
But a sluggish economy, slowing ad sales and the continuing poor performance of its ACP Magazines division, have combined to slow the timing of the float.
Nine Entertainment has a reported $4 billion plus in debt due in 2013, so analysts were surprised at yesterday’s sale given there isn’t supposed to be pressure to raise cash for a debt repayment.
Carsales.com.au’s online involvement had increased interest in the Nine float, now its online businesses are mostly confined to Ninemsn.
But some analysts said the debt reduction had "simplified Nine Entertainment and made the float easier.
