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Sir Anthony O'Reilly and partners' A$3 billion ($3.38 billion) takeover bid for APN is likely to be blocked after a significant shareholder said it would vote against the offer, according to a media report from Australia.
O'Reilly's Independent News & Media and partners Providence Equity and Carlyle Group
have made a A$6.20 per share bid for the 60 per cent of Herald publisher APN that is not already owned by INM.
Shareholders at Dublin-based INM voted in favour of the purchase on Friday. But Melbourne's The Age newspaper said Australian investment firm Perpetual, which holds 13.6 per cent of APN, would reject the offer. The newspaper said the opposition had been confirmed at the fund manager's "most senior levels".
The APN offer is built on a scheme of arrangement that requires support of 75 per cent of shares not held by INM, Carlyle or Providence.
Australian Foundation Investment Company, which holds 1.3 per cent, said this month it would also block the scheme. This means only one other fund manager or a collection of retail investors are needed for the bid's opponents to form a blocking stake.
The Age reported that 20 per cent of investors' proxy votes received so far had been against the takeover, making it likely the blocking stake would be reached. The final vote on the APN takeover is on Friday, with proxy votes due on Tuesday.
The INM-led consortium has twice raised its bid for APN, after an initial offer of A$6.02 per share, because of resistance from shareholders who believed it was too low.
Last month the consortium increased its bid by 10c to a "final offer" of A$6.20 per share.
An independent report by Deloitte said the bid was fair and reasonable, but at the lower end of valuations. The report found the fair market value of APN shares, if the whole company was available to be sold, was between A$6.18 and A$6.53.
Shareholders have been warned that the price could fall to the A$5.50 mark if the bid is unsuccessful.
Shares in APN closed on Friday at A$5.98 on the ASX.
The consortium's offer takes advantage of changes to Australian media ownership rules and will generate funds for INM to invest in other markets. It is understood INM plans to increase APN's debt, giving it cash to invest in assets that could provide a better return.
APN News & Media is Australia's fourth-biggest media company. In New Zealand it owns the New Zealand Herald and regional newspapers. It is also in a joint venture with the US radio company Clear Channel Communications in ARN, which owns the Radio Network with half of New Zealand's commercial radio stations.
