Rupert Murdoch’s News Corporation (NASDAQ:FOXA) has announced that they will be acquiring a 14.99 per cent stake in APN News and Media (ASX:APN). APN is in control of the Australian Radio Network, the KIIS FM brand, and owns many regional publications, including the New Zealand Herald. News Corp has cited the “high quality portfolio” of APN as part of the reason for the purchase. News Corp currently owns a 4.9 per cent stake in APN and is seeking to increase their stake to 14.99 per cent. To do this, News Corp will pay 88c per share for a total of A$136m. News Corp noticed two other previous shareholders selling of their stake and took advantage of the situation. Ireland’s Independent News & Media Plc (INM) is selling its 18.6 per cent stake to repay its debt. Baycliffe, which is owned by INM’s largest shareholder Denis O’Brien, is also selling its 12.2 per cent stake.
Shares of APN climbed 14 per cent in the early hours of trading before retreating later in the day. APN is currently up .5c, or .53 per cent, today at 2.33pm (AEDT). Despite the newspaper industry’s struggling business structure in the digital age, shares of APN are up 13.41 per cent so far this year and are boasting a 55.25 per cent one year return. Earlier this week fund manager Allan Grey Australia cut its shareholdings by about 2.2 per cent down to 15.5 per cent in total. APN is a major part of Allan Grey Australia’s overall investment portfolio. Despite the recent selloffs, APN has been looking solid and this has been reflected by News Corp’s interest in this radio and news company.
Author: Matthew Dibb
Mar 20, 2015
Matthew has an extensive track record in equity markets and derivative advisory. Spanning a career in several investment banks and prviate wealth groups including Macquarie Bank, his specialist knowledge relates to capital market advisory and equity market analytics. Matthew has a diploma in Financial Advisory, Applied Finance and is ADA 1 & 2 accredited.