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NZME IPO plans still under way says APN

Friday 14th November 2014

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APN News & Media, the Australian publisher of the New Zealand Herald, has reaffirmed plans to float its local media operation, NZME, scotching media reports the initial public offer had stalled.

Last week Sydney based APN announced a $54 million impairment on its New Zealand newspaper mastheads in its 2014 results and forecast a 5.1 percent decline in 2015 earnings for NZME. Earlier in the year APN bundled its New Zealand business, which include The New Zealand Herald, The Radio Network and GrabOne, under one banner with the ultimate aim for an initial public offer on the NZX and ASX before the end of the year.

"APN has received broad and positive feedback from a series of investor presentations as a first step designed to build awareness and understanding about NZME. APN continues to assess strategic options for NZME. including a possible IPO," the company said in response to what it called "incorrect media speculation" that it had abandoned its IPO plans.

"No decision as to the outcome of the strategic review or timing has yet been determined, and consideration will be given to further progressing the transaction in the New Year," it said.

At the Steel & Tube annual meeting, John Anderson, chairman designate of NZME should it float, wouldn't be drawn on listing plans, other to say they were underway.

The traditional media industry is under pressure as businesses are yet to figure out how to make money from online news, while audiences and advertisers are increasingly difficult to capture. NZME is chasing revenue growth by boosting its digital and e-commerce offerings, and expanding its promotional events, such as iHeartRadio concerts. It expects new initatives and digital revenue to bring in $55 million in the 2015 financial year.

NZME's 2015 earnings before interest, tax, depreciation and amortisation are expected to fall 5.1 percent to $70.8 million, it said. In August, the New Zealand unit posted an 8 percent decline in first half revenue to A$201.6 million, and a 9 percent fall in Ebitda to A$34.6 million, reflecting the sale of South Island and Wellington community newspapers, and several magazine titles, including the weekly Listener magazine, to Germany’s Bauer Media.

An initial public offer of 60 percent of NZME 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, according to the offer documents APN released when it was attempting to raise US$250 million in an unsecured note offer to American investors.

It has since abandoned the US notes plan, after they were assigned a sub-investment, or junk grade rating, by the major three rating agencies.

 

Shares of dual listed APN fell 1.4 percent on the ASX, to 70.5 Australian cents and declined 1.2 percent to 80 cents on the NZX.

BusinessDesk.co.nz



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