Rupert Murdoch's News Corp has agreed to pay $36.6 million for APN News & Media's Australian regional media business (ARM).
ARM includes 12 daily newspapers - such as Gladstone's The Observer, Bundaberg's NewsMail, The Gympie Times and Lismore's The Northern Star - and 60 community publications across northern New South Wales and Queensland, as well as 30 regional news websites,
The deal comes a few months after APN revealed its plan to offload the regional division as it announced a loss of $10.2 million for the year.
News Corp is an APN shareholder and currently holds 14.9% in APN. As a result, APN shareholders will be required to vote on the proposed sale. The transaction is also conditional on ACCC and FIRB approval, together with the consent of counterparties to the ARM business.
In a statement to the ASX, APN chairman Peter Cosgrove, described the divestment as another significant milestone in APN pivoting its future towards radio and outdoor media assets which hold great potential for the future.
“The divestment of ARM is an historic day for the company as APN has been the custodian of some wonderful newspapers whose community roots go back over 150 years. We are now passing that ownership onto another media group with deep publishing experience across regional Australia.
“The future of APN looks bright. On the back of the NZME demerger that was overwhelmingly supported by our shareholders last week, we will be a more nimble media company purely focused on growing our media assets of radio and outdoor,” Mr Cosgrove said.
APN CEO Ciaran Davis said the management team was executing a clear strategy to own and invest in its highly successful radio business and growing outdoor division. “Radio and Outdoor are terrific mediums for advertisers. The sectors are growing, they are complementary, and they have both led innovation in the media industry across the digital sector,” Davis said.
According to well-informed News Corp's The Australian, APN wanted $50 million for its regional newspapers, and News Corp and Singapore-based Fetch Plus both had lodged offers when final bids were due on Friday.
The deal comes on the back of a vote last week by APN shareholders in favour of demerging its New Zealand business NZME, including flagship The New Zealand Herald.
"It means in the space of one week, APN has effectively exited traditional publishing altogether," said The Australian Financial Review.