APN Mulls New Share Sale as Investor Seeks CEO ChangeDavid Fickling
APN News & Media Ltd., the publisher of the New Zealand Herald, said it may sell new stock to raise cash as its largest shareholder seeks the removal of Chief Executive Officer Brett Chenoweth.
The publisher asked for its shares to be halted as Macquarie Group Ltd. provides advice on a potential capital raising, Sydney-based APN said in a statement. The company may need to raise about A$100 million ($103 million), said Samantha Carleton, an analyst at Credit Suisse Group AG in Sydney.
Independent News & Media Plc, which owns 29 percent of APN, has lost confidence in Chenoweth’s ability to reposition the publisher “for the more challenged media landscape” and is seeking a special meeting of shareholders, the Dublin-based company said in an e-mailed statement. Directors not nominated by Independent News “unanimously support” the CEO and his strategy, APN said today.
“Chenoweth’s got a very, very difficult task” and probably needs more cash amid declining revenues and a lack of asset sales, Carleton said by phone. “We were expecting APN to sell its outdoor or radio business to generate cash, so a capital raising is not a surprise. Perhaps they need to raise capital a little quicker than previously thought.”
To reduce net debt to about double its earnings before interest, tax, depreciation and amortization APN would need to raise about A$100 million, or about half its market value, Carleton said.
APN shares have fallen 61 percent over the past year amid a slump in advertising and a A$485 million writedown of its New Zealand publications. The stock closed at 30 Australian cents yesterday, giving it a market value of A$199 million.
The publisher, which is due to report annual results Feb. 21, hired Deutsche Bank AG in May to review its New Zealand newspaper business after receiving approaches from potential buyers. In December, it said it would sell some regional units amid a 10 percent decline in group revenue over the period.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.