APN News & Media in talks with Fairfax New Zealand over merger of NZME

NZMEAPN News & Media has confirmed it is in talks with Fairfax Media to “explore” a merger between its New Zealand business NZME and Fairfax New Zealand.

The move comes as APN this morning announced a $180m capital raising to raise cash to help “demerge” the NZME business from the main company and float it on the NZ stock exchange.

Fairfax Media CEO Greg Hywood said in a statement filed to the ASX this morning: “This is an important opportunity for all of our shareholders to be part of the future in content and journalism in New Zealand. The merger would enhance the position the businesses are in to continue to deliver high quality, local content to audiences now and in the future.”

The demerger will see eligible APN shareholders receive one new share in NZME for each existing APN share they hold, while retaining their existing APN shareholding.

Ciaran Davis

Davis: ‘The merger of NZME and Fairfax’s NZ business provides an exciting opportunity for our shareholders’

APN CEO Ciaran Davis said: “Along with the other initiatives APN announced this morning, the merger of NZME and Fairfax’s NZ business provides an exciting opportunity for our shareholders, particularly our New Zealand shareholders, to participate in the creation of a leading media business for New Zealanders.

“The combination of these two businesses would provide the necessary capability to continue investing in high-quality local news, sport and entertainment at a time when advertiser commercial investment continues to fragment across international media platforms that do not invest in local content.”

APN News & Media, Fairfax and NZME intent to work towards the completion of the NZME-Fairfax NZ merger by the end of the calendar year, although any deal would require approval from the NZ Commerce Commission and other regulators to go through.

APN has been looking to shed its New Zealand business since 2014, according to a report in Crikey, which points out that any deal will give News Corp, which owns 14.9% of APN, a good foothold in New Zealand.

On Monday the business went into a trading halt following reports in The Australian of the demerger and a capital raising plan of $200m.

Today APN News & Media announced it will raise approximately $180m through a “fully underwritten 1 for 3 accelerated renounceable entitlement offer with retail entitlements trading”.

The proceeds of the entitlement offer will be used to repay a portion of APN’s corporate debt and if, the demerger of its NZ assets proceeds, to facilitate the establishment of appropriate capital structures for APN and NZME.

The demerger and capital raising follows on from APN News & Media signalling in February its plans to sell off its struggling Australian Regional Media arm.

APN News & Media was trading at 63 cents when trading was suspended on Monday giving the company a market capitalisation of $648.30m.


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