Murdoch moves on APN with $90 million investment

News Corp picks up a 14.99 % stake in the media group that operates regional newspapers and radio stations on both sides of the Tasman.

The deal gives the dominant newspaper company leverage over the fate of New Zealand leading newspaper, The New Zealand Herald, as well as more than 100 regionals, many of them in Queensland. It virtually puts the kybosh on any production sharing arrangement being discussed between APN and Fairfax. It also gives News Corp a veto over any takeovers it doesn't like.

The size of the News Corp stake in APN is limited by because News Corp's vice-chairman, Lachlan Murdoch owns rival radio network, Nova Entertainment. It's against the law for any media owner to control more than two radio licenses in a major market. While newspapers may be the soul of News Corp it is undoubtedly APN's radio assets that attract the Murdoch attention.

Shares in APN became available after Irish billionaire, Denis O'Brien offloaded 191 million shares for about $180 million that were owned by his Independent News & Media as well as 125 million shares, valued at $117 million, from his investment company Baycliffe. It sees the end of the dominance by Irish investors in the company stretching back over 27 years.

The transaction sets up the very real possibility of News and APN sharing press power and distribution facilities. In the event that APN goes ahead with a mooted share float of its NZ operations, News would be in the box seat to buy The New Zealand Herald.