CanWest hits 70pc as TAB cashes in

By KAREN SCHERER

Canadian media group CanWest has confirmed it is keen to see New Zealand's second-largest radio company disappear from the Stock Exchange, in a move which could cost it more than $100 million.

But it is so far resisting calls by RadioWorks' board to raise its offer for the company, saying yesterday that it was happy to sit on 70 per cent control.

The Canadian company pounced on RadioWorks, formerly known as Radio Pacific, last week, offering $8.25 a share - a 23 per cent premium on its previous price.

By the close of trading yesterday, it had convinced shareholders to part with 57 per cent of the company.

Another major shareholder, the Totalisator Agency Board, also confirmed yesterday that it had decided to sell its stake, which amounts to 12 per cent.

TAB president Rick Bettle, who is also on RadioWorks' board, said he had excluded himself from discussions about whether the betting agency should cash in its chips.

However, he understood the organisation had decided to take an $11 million profit on its shares as the cash was "much-needed money for the racing industry."

The TAB has a contract with RadioWorks to cover race meetings that is not due to run out until 2011, and Mr Bettle said he was confident the contract would continue.

The TAB's decision flies in the face of advice from RadioWorks' board that shareholders should continue to hold out for a higher price.

So far, the only director of RadioWorks to have sold his shares is chairman Derek Lowe.

Mr Lowe is understood to have sold his 4.7 per cent stake for just under $5 million.

Other directors, who between them have 14 per cent of the company, are so far standing firm.

Following a meeting with CanWest representatives, the board said yesterday that it had received independent advice from Grant Samuel & Associates that the company was worth between $106 and $120 million.

It was therefore recommending shareholders hold on to their shares.

The CanWest offer values the company at just under $100 million and it would need to raise its price to at least $8.80 a share to meet the Grant Samuel valuation.

CanWest retaliated yesterday by saying it was happy with the 70 per cent of shares it had already gained and was in no hurry to acquire any more.

While CanWest Radio head Brent Impey acknowledged that the media group was keen to acquire more shares, he stressed that the company's advice was that $8.25 a share reflected the "full value" of RadioWorks.

Yesterday's talks between the two companies are not believed to have broached management issues such as possible cost savings, and no further talks have yet been planned.