KEY POINTS:
A takeover deal is imminent for one of the country's biggest media companies.
CanWest Mediaworks, which operates TV3, C4 and a number of radio stations including Radio Live, is the target.
And once again, it's the current darling of the mergers and acquisitions scene, "private equity", which is
behind the deal.
The buyer is HT Media, a subsidiary of private equity firm Ironbridge Capital. The offer values MediaWorks at $727 million, including net debt.
CanWest's majority Canadian owner has agreed to sell its 70 percent holding in the TV and radio broadcaster.
The offer follows the entry into a lock-up agreement by Ironbridge Capital and CanWest MediaWorks Ireland Holdings (CMIH).
Under that agreement CMIH agreed to sell its approximately 70 per cent stake in MediaWorks into the takeover offer to be made by Ironbridge for $2.43 per share in cash.
CMIH expects to receive aggregate gross proceeds of about $386 million for the 158.6 million ordinary shares that it owns in MediaWorks.
Ironbridge said the offer price of $2.43 per share to all shareholders represented a 49 per cent premium to the closing price of $1.63 on October 20, the day before the announcement of CMIH's decision to reconsider its ownership in MediaWorks.
It was also a price higher than MediaWorks' shares have traded in the past two years.
MediaWorks chief executive Brent Impey said a committee of independent directors, comprising David Jackson as chairman, Susan Sheldon and Craig Thompson had been formed to oversee all aspects of the company's response to the offer.
It was not appropriate for the company to comment on the merits of the offer for now, Mr Impey said.
But it was clear that CMIH was likely to exit the company as a shareholder.
Along with TV3 and Radio Live, MediaWorks owns and operates the C4 television network and national radio brands The Edge, The Rock, More FM, Kiwi FM, Radio Pacific/Radio Trackside, Solid Gold and The Breeze, as well as several local radio stations.
Ironbridge Capital is making the takeover offer for all of the ordinary shares and outstanding options of MediaWorks through a newly incorporated subsidiary HT Media Ltd.
Ironbridge said it expected the takeover offer notice would be delivered to MediaWorks within seven days and the offer would be sent to shareholders within 30 days of delivery of that notice.
The offer would be subject to usual conditions, including the approval by New Zealand's Overseas Investment Office.
The acceptance of its offer had followed a lengthy and highly contested bidding process for CMIH's 70 per cent stake, Ironbridge said.
MediaWorks' shareholders would be entitled to the company's interim dividend of 4.8 cents per share intended to be paid on May 14.
Ironbridge's offer permitted MediaWorks to pay a fully imputed special cash dividend of about 11 cents per share before the settlement of the takeover offer.
This special dividend was being considered by the MediaWorks board, and if it was paid the Ironbridge offer price per share would be adjusted accordingly.
Ironbridge Capital NZ operational partner Kerry McIntosh said the vendor recognised not only the attractive offer Ironbridge put forward, but equally its commitment to preserve the strength and integrity of the MediaWorks business.
"Consistent with our investment philosophy, we are highly supportive of the management and staff at MediaWorks."
Ironbridge Capital manages funds of more than A$1.5 billion ($1.69 billion), describing its focus as investments in medium to large management buyout and expansion capital transactions in Australasia.
The MediaWorks transaction is the fourth Ironbridge investment in this country.
Just last week it announced the completion of its acquisition of New Zealand waste management firm EnviroWaste Services from Fulton Hogan.
The EnviroWaste deal was the second investment in the Ironbridge Fund II which closed with A$1.05 billion in commitments last December.
In December 2005, Ironbridge completed the acquisitions of several aged care facilities in this country. The largest was North Island operator Elrond Group Holdings, along with several purchases in the South Island.
The business was incorporated under the name Qualcare Group Holdings, operating 16 retirement villages across New Zealand.
In June 2004 Ironbridge led the $50 million management buyout of backpackers' operator ACB Holdings.
MediaWorks shares closed at $2.34 yesterday, having ranged between $2.40 and $1.23 in the past year.
- NZPA
