RadioWorks directors hold out against CanWest share raid

By KARYN SCHERER

Several major shareholders of New Zealand's second-largest radio company are continuing to hold out against a raid by Canadian-owned media company CanWest Global Communications.

The directors of RadioWorks say they have yet to be convinced that CanWest is paying a fair price for control of the company, despite its offer of $8.25 a share, which is well above last week's price of $6.70.

However, their refusal to sell has failed to deter a clutch of small investors, who yesterday handed over another 11 per cent of the company.

A decision by RadioWorks chairman Derek Lowe to sell his 5 per cent stake is believed to have triggered a flood of sales from small shareholders and by the close of trading yesterday CanWest had increased its holding to 56 per cent.

The media company, which already owns TV3, TV4 and the More FM radio group, will make further stands in the market today and tomorrow in the hope of boosting its stake to 70 per cent.

Mr Lowe's decision to sell is understood to have netted him more than $3 million, and follows his widely signalled intention to wind down his involvement in the radio company.

However, the company's other directors are so far refusing to sell.

Energy Nominees, which includes the interests of managing director Steven Joyce and directors Norton Moller and John Armstrong, said it planned to hold on to its 9.5 per cent stake until it had talked to CanWest about its plans.

Two other directors, Walter Rutherford and Colin Giffney, have also said they are not yet prepared to sell.

The TAB, which has around 12 per cent of the company, is also holding on to its shares at this stage.

RadioWorks executives have made it clear they have been miffed by CanWest's reluctance to discuss its intentions, but the two parties confirmed yesterday they planned to meet today for initial talks.

Among the questions RadioWorks' board is seeking answers to is whether CanWest is aiming for 100 per cent control.

Mr Joyce said yesterday that he assumed CanWest was aiming for that.

However, the head of CanWest's radio division, Brent Impey, insisted no decisions had yet been made about taking its stake any higher.

"It rather depends on the position that is taken by the RadioWorks board and by remaining shareholders," he said.

Other issues likely to be discussed at today's meeting are CanWest's plans for the company, and the possible ramifications for the radio industry of having just two main players.

"Until we have an answer to those questions, we don't have a view on whether we should sell," said Mr Joyce.

Meanwhile, the raid has prompted Deputy Prime Minister Jim Anderton to renew his calls for national interest criteria to be included in foreign investment decisions.

Mr Anderton yesterday questioned whether it was in the country's interest to have more than 90 per cent of the radio market controlled by foreign companies.

The Overseas Investment Commission has approved the CanWest purchase, but Mr Anderton reiterated his concerns that foreign investors should be required to create jobs, introduce new technology and not harm the environment or further worsen the current account deficit.

RadioWorks' main competitor, The Radio Network, is owned by a consortium of foreign-owned companies, including New Zealand Herald publisher Wilson & Horton, APN News & Media and Clear Channel Communications.