Struggling regional media group, APN News & Media (APN) is expected to announce a capital raising and demerger of its New Zealand business NZME at its AGM in Sydney tomorrow.
That was after media reports yesterday in the wake of the news that the company had requested that its shares to be suspended until Wednesday morning to allow for a decision on the demerger of the Kiwi print interests.
At the same time there are also media reports that APN and Fairfax are considering merging their NZ newspaper groups – a decision that will have to be done carefully to avoid competition concerns.
The demerger will free up APN so it can focus on its growth media assets of radio and outdoor, and will be supported by a capital raising of as much as $200 million to give the two companies the necessary balance sheet firepower.
A key support for any raising will be the attitude of its biggest shareholder, News Corp Australia with 14.9%. News would contribute $30 million to a raising as large as $200 million or a third of APN’s current market value of $592 million.
Former APN chief executive Michael Miller is now executive chairman of News Corp Australia. He discussed the idea of some sort of link up in NZ with Fairfax Media which is the other major newspaper group across the Tasman.
NZME will be listed on the local exchange and be one of the largest stand-alone media companies in the New Zealand market.
APN shareholders will be given shares in NZME as part of the demerger, much in the way that NAB shareholders received shares in the spin off of the Clydesdale Bank in Britain last year.
Fairfax Media yesterday downplayed stories in News Corp media yesterday that fairfax was exploring some sort of deal across the Tasman.
Fairfax issued a statement sating that “it continues to explore options for all its businesses including Fairfax New Zealand, but at this time there is nothing to disclose.
APN has its Australian regional newspaper assets on the market and there are reports that News Corp is sniffing around them. But competition restrictions will apply in some markets.
APN put its 100-plus Queensland and NSW regional and community newspapers and websites up for sale in February and took a $50.8 million write down of the assets to improve their attractiveness to possible buyers.
APN has said it wants to focus on growing its more successful businesses, the Australian Radio Network (ARN) and its trans-Tasman outdoor advertising business Adshel. It also has radio interests across the Tasman in NZME.
ARN’s radio stations include KIIS 1065 Sydney, KIIS 101.1 Melbourne, 97.3 Brisbane, Mix102.3 Adelaide and Perth’s 96FM, while Adshel provides advertising space on static and digital billboards. APN shares closed at 63 cents last Friday.
