Healthy admart forecast underpins CanWest float

By Duncan Bridgeman

Friday 2nd July 2004

A buoyant advertising market suggests CanWest has timed the float of its New Zealand unit well.

Total Media chief executive Martin Gillman predicts the advertising market will stay healthy through to the second quarter next year, defying the doom and gloom merchants' expectation of a bubble burst.

Gillman said the advertising market was still catching up with the robust retail sector and was confident of healthy advertising figures for another 12 months.

"Even then we don't think it's going to die suddenly," he said yesterday.

The partial float of CanWest's New Zealand radio and television operations will raise up to $135 million, which will be used to pay down debt in the Canadian parent's business, CanWest Global's chief operating officer Tom Strike said.

CanWest also wanted to create access to the local capital markets, he said.

The company launched its offering on Wednesday at a hyped up presentation in Auckland featuring TV3 personalities John Campbell and Carol Hirschfeld.

The indicative price range for an auction to institutions for the offer of 68 million shares is between $1.50 and $1.65 a share.

Any over allotment will be taken at the discretion of CanWest and organising broker, Goldman Sachs JB Were.

CanWest will announce the final share price on July 12 after the institutional book build, with the listing scheduled for July 29. The Canadian parent will hold 64-70% of the new company, to be called CanWest MediaWorksNZ.

Goldman Sachs JB Were chairman Clarke Perkins said the pricing was set in a "favourable range" to attract investors.

Depending on the final IPO price the company will have a market capitalisation of $340-374 million.

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