Trans-Tasman media group APN News & Media looks set to try to unload its New Zealand business NZME - including flagship The New Zealand Herald - after calling off an initial public offering for the newspapers, radio and digital company.
The Australian newspaper, owned by APN shareholder News Corp, reported that APN was expected to demerge its New Zealand business, with the company just weeks away from announcing a decision:
APN will update the market on its plans for the business, called NZME, at its annual general meeting on May 11, but sources told The Australian that management was leaning towards an in-specie distribution to its shareholders. Shareholders would hold stock in APN and a separately listed NZME should management pursue this option. APN could also raise money from new shareholders in combination with a demerger to existing shareholders.
The report comes a couple of months after APN posted a loss of $10.2 million for the year and announced plans to offload its Australian regional newspaper business ARM, which includes 12 daily newspapers and 60 community publications. At the time, APN CEO Ciaran Davis spoke of the need to develop the digital side of the business and to focus on growth assets and opportunities.
NZME’s earnings are skewed towards newspapers, which are facing structural challenges and may not be attractive to new shareholders, while the company said in February that advertising conditions were not conducive to an IPO, said the well-briefed report in The Australian, which added: It’s understood the combination of the Kiwi businesses has made it more difficult for potential trade buyers to pounce, given they may have been after particular assets.
NZME, which publishes the New Zealand Herald newspaper and operates The Radio Network, reported a three percent fall in revenue in 2015 to $433 million, with circulation from its publishing division down five percent.
NZME’s former CEO Jane Hastings resigned last month and was replaced by former CFO Michael Boggs.