APN on track to announce IPO of NZME. in coming weeks

Photo / Glenn Jeffrey

APN News & Media is still considering floating its New Zealand media unit with a board appointment announcement this afternoon expected to show the Australian parent isn't considering a trade sale.

Last month, the Sydney-based media company renamed its New Zealand operations, which include The New Zealand Herald, GrabOne and The Radio Network, under one roof as NZME..

Earlier that month APN said it was mulling an initial public offer on the NZX, while retaining a 40 percent stake, for its carved out kiwi business. Although recent media reports suggested APN is considering selling the kiwi business as a whole.

A board announcement this afternoon will show the company is heading towards a listing, a spokesman from SenateSHJ, acting for APN, told BusinessDesk.

"The current status is they are considering an IPO, that status is still the same," he said. "There will be an announcement coming out, probably this afternoon, around some board appointments that suggest a trade sale is probably not where they're going."

An initial public offer of 60 percent of NZME. would generate some A$308.6 million of gross proceeds, based on the carrying value of the unit. Of that, some A$169.4 million would be raised through the float, and a further NZ$150 million from a 'note payable' as a result of restructuring the New Zealand unit, according to the offer documents APN released when it was attempting to raise US$250 million in an unsecured note offer to American investors.

It has since abandoned the US notes plan, after they were assigned a sub-investment, or junk grade rating by the major three rating agencies.

Watch:

APN relaunches as NZME.

In August, the New Zealand unit posted an 8 percent decline in first-half revenue to A$201.6 million, and a 9 percent fall in earnings before interest, tax, depreciation and amortisation to A$34.6 million, reflecting the sale of South Island and Wellington newspapers and several magazine titles, including the weekly Listener magazine, to Germany's Bauer Media.

APN is expected to formally approach investment banks to manage the NZX listing this week and has said the final decision on the IPO will come down to the price it can get for the New Zealand media company.

Shares of dual listed-APN fell 2.4 percent to 80.5 Australian cents on the ASX and were unchanged at 90 cents on the NZX.