Station buy swells APN's radio foothold in Australia

APN News and Media CEO Michael Miller.

APN News & Media has increased its presence in the Australian broadcasting scene through the purchase of Perth radio station 96FM from rival publisher Fairfax Media for A$78 million ($82 million).

APN, which in September put its New Zealand operations, including the Herald, into one entity called NZME., said the acquisition would be funded by cash and existing debt facilities.

Chief executive Michael Miller said radio was strategically important to the company in Australia and New Zealand.

"In both countries radio has shown that its share of advertising expenditure over the past decade has been maintained," Miller said.

In New Zealand, radio's share of the media pie had been maintained at 11 per cent and at 8 per cent in Australia, he said.

"There are structural differences between the two countries but we definitely see radio as being a great medium and the radio businesses for APN have continued to outperform the market."

When APN put its New Zealand businesses into NZME. it raised the possibility that the new entity could be floated on New Zealand and Australian exchanges.

APN held a series of investor presentations on NZME. in November.

"We have had positive feedback but there has not been a decision [to proceed], as yet," Miller said. "We will update the market at our next results presentation on February 12." NZME. also owns The Radio Network and the bargain-based daily-deal internet platform, GrabOne.

Miller said 96FM would be integrated into APN's Australian Radio Network (ARN) completing a five-capital city offering.

"The acquisition of 96FM continues APN's emphasis on investing in growth assets and demonstrates our belief in radio as a growth medium," Miller said.

96FM is a locally-focused station aimed at the 25 to 54-year-old demographic.

Fairfax Media plans to raise about A$96 million by selling its 96FM to APN and merging its remaining radio assets with Macquarie Radio Network.

Fairfax will merge its Fairfax Radio Network unit with ASX-listed Macquarie Radio Network (MRN), generating about A$18 million in cash and giving the Sydney-based media company a 54.5 per cent stake in an enlarged MRN which would remain listed, it said.

That deal is subject to approval by existing MRN shareholders, who would be diluted to 45.5 per cent of the enlarged company.

"The merger creates a genuine national talk radio network that wasn't previously available to advertisers," said Fairfax chief executive Greg Hywood.

The dual-listed shares of APN closed yesterday at 78c on the NZX, and A78c on the ASX. Fairfax closed at A84.5c on the ASX.

Additional reporting BusinessDesk