Talk about the possible merger of two of New Zealand's largest media businesses continues today, with APN tipped to be preparing to announce a capital raising of up to A$200m and Fairfax's New Zealand assets estimated to be worth A$200m.
The Sydney Morning Herald has reported that APN News & Media and Fairfax are considering a merger but both companies have declined to comment.
The two are "understood to be in early exploratory talks with APN to announce the demerger of its New Zealand business on Wednesday at its annual general meeting."
"It is understood that Grant Samuel is providing advisory work on the possible merger of NZME with Fairfax Media's New Zealand assets. Fairfax Media is the publisher of The Australian Financial Review and BusinessDay," the SMH has reported.
APN owns New Zealand Herald publisher New Zealand Media and Entertainment (NZME) which has radio stations including NewstalkZB, several provincial newspapers and coupon business GrabOne.
Any merger here would be subject to Commerce Commission clearance.
Fairfax shares are not in a trading halt, which some say is a sign that no merger is being discussed.
An ASX announcement from Fairfax Media said: "Fairfax continues to explore options for all its businesses including Fairfax New Zealand, but at this time there is nothing to disclose.
"Fairfax is aware of its continuous disclosure obligations and confirms that it is in compliance with the ASX Listing Rules. Fairfax will keep the market informed as required."
Speculation is that APN will announce a capital raising and demerger of its New Zealand businesses tomorrow at its annual general meeting.
Market analysts have suggested that the capital raising could be as much as A$200 million. APN shareholders could be given shares in NZME as part of the demerger.
Craig's Mark Lister said approval of an NZME-Fairfax merger by the Commerce Commission should not be ruled out but Harbour Asset Management's Shane Solly said merging the two operations would be a challenge from a competition perspective.
APN went into a trading halt yesterday telling the ASX: "The trading halt is requested pending the release of an announcement concerning a potential material transaction by APN in relation to APN's New Zealand business, NZME."
The Australian reported: "It's believed Credit Suisse/ First NZ and UBS are working on the equity raising, which is expected to be a rights issue, while Grant Samuel is advising the company.
"APN News & Media is preparing to launch a A$200 million-plus capital raising in conjunction with a demerger of its New Zealand assets. The radio, outdoor advertising , print and digital business will update the market on the planned divestment of its Kiwi business , called NZME, at its annual general meeting on Wednesday."
Another report from The Australian said: "Fairfax Media is considering spinning off its New Zealand newspaper, magazine and digital business, worth an estimated A$200 million, as the 185-year old publisher fights for a sharemarket re-rating. Fairfax owns New Zealand mastheads, The Dominion Post and The Press, magazines including TV Guide and NZ House and Garden, as well as the news website Stuff.co.nz.
"The Australian understands a spin-off is under consideration, which could encompass a demerger to existing Fairfax shareholders, an initial public offering, or a trade sale," it said.