By NZPA
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Tuesday 8th May 2007 |
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Ironbridge announced today it had agreed to buy the 70% stake in MediaWorks owned by a subsidiary of the company's Canadian parent CanWest Global Communications Corp.
It was paying $2.43 a share and launching a takeover bid for the remaining shares in MediaWorks.
The offer values MediaWorks at $727 million, including net debt, while CanWest Global expects to receive aggregate gross proceeds of about $386 million from the sale of its shares.
MediaWorks owns and operates television networks TV3 and C4, and national radio brands Radio Live, The Edge, The Rock, More FM, Kiwi FM, Radio Pacific/Radio Trackside, Solid Gold and The Breeze, as well as several local radio stations.
Also today, fund manager Brook Asset Management notified the sharemarket that it had increased its holding in MediaWorks from 6.4% to 7.3%.
Brook executive chairman Simon Botherway said Brook would wait for an independent expert's report before deciding whether to sell its MediaWorks shareholding.
Its decision would be based on forecasts included in that report, he said.
Brook had owned MediaWorks stock since its initial offering and had accumulated further shares when the price was weak.
"It's a very good company, great media properties and we're very comfortable with the management," Botherway said.
MediaWorks shares debuted in July 2004 with an issue price of $1.53, opening at $1.65. In the past year they have ranged between $2.40 and $1.23. At one point today, after the takeover announcement, they were up 8c to $2.42.
Ironbridge director Mike Hill said MediaWorks had a strong management team that Ironbridge was supportive of, and was in a sector his firm understood.
"The offer that's on the table at the moment is sufficiently attractive we feel to ensure that we will get to that 100% (ownership) level," Hill said.
"However, the offer is only subject to a 50% acceptance, which is obviously delivered by virtue of the CanWest stake, so we're comfortable either way."
Ironbridge had not been interested in CanWest's Australian assets -- a 56.4% stake in Australian broadcaster Ten Network Holdings -- which are also for sale, he said.
MediaWorks chief executive Brent Impey said a committee of independent directors, comprising David Jackson as chairman, Susan Sheldon and Craig Thompson had been formed to oversee all aspects of the company's response to the offer.
It was not appropriate for the company to comment on the merits of the offer for now, Impey said.
Ironbridge said its $2.43 per share offer represented a 49% premium to the closing price of $1.63 on October 20, the day before the announcement of CanWest Global's decision to reconsider its ownership in MediaWorks.
It was also a price higher than MediaWorks' shares have traded in the past two years.
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