Nine Said to Seek About A$675 Million in IPO With Owners

Nine Entertainment Co. and its owners may raise about A$675 million ($641 million) in Australia’s largest initial public offering in almost three years, said two people with knowledge of the matter.

Owners including Oaktree Capital Group LLC will sell about A$400 million in existing shares while the company will issue roughly A$275 million in new stock to fund debt repayments, the people said, asking not to be named as the information is private. Oaktree will sell almost half of its 26 percent stake while Apollo Global Management LLC plans to initially keep its holding of about 28 percent, the people said.

The IPO will value Australia’s second-largest broadcaster at about A$2.6 billion including debt, or 8.5 times its forecast full-year earnings before interest, tax, depreciation and amortization of A$305 million, a person familiar with the matter said Oct. 28. The shares will be marketed at A$2.05 to A$2.30 each and start trading in early December, the person said.

Apollo, Oaktree and other funds took control of Nine last year in a debt-for-equity swap that saw previous owner CVC Capital Partners Ltd. lose the majority of its investment. Nine, which also owns a ticketing business and the country’s largest indoor music venue, in the past two months bought an affiliate station in Western Australia state and Microsoft Corp.’s 50 percent stake in the Mi9 joint venture.

CVC Agreement

Under the restructuring plan agreed last October, about 60 percent of a A$5.75 billion debt and equity investment by CVC was wiped out. Senior lenders including Apollo and Oaktree received A$573 million in cash and a 95.5 percent stake in Nine, according to Federal Court documents in December. London-based CVC had bought the broadcaster from billionaire James Packer’s Publishing & Broadcasting Ltd.

Spokesmen for Oaktree and Apollo declined to comment. UBS AG, Morgan Stanley and Macquarie Group Ltd. are among banks leading the share sale.

Los Angeles-based Oaktree, the world’s biggest investor in distressed debt, in September took control of Australia’s Billabong International Ltd. together with Centerbridge Partners LP after the funds won approval for a plan to refinance the surfwear maker’s debt.

Apollo, the private-equity firm run by Leon Black, is on track to raise $15 billion for a new buyout fund, the largest since Blackstone Group LP raised $21.7 billion in 2007, people with knowledge of the matter said Oct. 7.

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