Herald publisher APN News and Media has confirmed it has received a proposal from Sir Anthony O'Reilly's Independent News and Media (INM) to buy the shares it does not already own in the company.
APN, which has extensive media interests in Australia and New Zealand, confirmed "a preliminary approach" but
said yesterday that it did not amount to a formal bid.
The APN board issued a statement that it was looking at opportunities after the change in Australian rules for media ownership, but declined to comment further following a report in the Australian newspaper yesterday.
It said INM, in partnership with private equity firms, was offering $6 a share for the 59 per cent of the company that it did not own, estimating the deal at $A3.8 billion ($4.4 billion).
APN shares closed on the ASX yesterday at $6.05, up 56c.
ABN Amro media analyst Fraser McLeish in Sydney said the bid appeared unlikely to be purely a defensive move, because with a 41 per cent stake INM had always controlled APN's future, but the reported involvement of a private equity firm in the bid indicated the purchase of APN could be the precursor to further moves.
McLeish said private equity companies were interested in media because they could leverage a high cashflow, but the cyclical nature of media was outside the normal focus of private equity companies.
APN is Australasia's largest radio broadcaster. In a joint venture with US radio company Clear Channel, it operates in 12 metropolitan markets in Australia and 120 stations in The Radio Network stable in New Zealand.
It owns 23 daily newspapers, including the Herald and 100 non-dailies and is in the billboard market.
The INM proposal to buy out APN is the latest in a string of deals that have followed changes to Australian media ownership rules.
