£442m Independent bid raises some hackles

OPPOSITION politicians in New Zealand have strongly criticised Independent Newspapers £442 million bid for the country's biggest newspaper group, Wilson & Horton, although there seems little likelihood of the bid being frustrated.

And W&H's own flagship newspaper, the New Zealand Herald, has reported that Independent deputy chairman John Meagher attempted to contact leaders of all the political parties in New Zealand ahead of the takeover bid, but had only been able to make contact with Prime Minister Jim Bolger.

Mr Meagher said that his discussion with Mr Bolger had been "extremely polite and courteous," but he denied that the timing of the bid had been influenced by fears of changes in the rules governing foreign ownership of the media that might be introduced after the October 12th general election in New Zealand. The timing was driven by commercial factors, he said.

But while the main opposition labour Party has promised a probe into cross-media ownership and the degree of foreign control of the media if it wins next months' general election, a senior Labour MP, Mr Steve Maharey, said that Labour's policy "does not mean Tony O'Reilly should be on the phone worried about a forced sell-down". Mr Maharey added: "The working party to examine these issues would look to the future not the past."

Other opposition parties have responded more negatively to the proposed takeover of New Zealand's biggest media group by Independent, with the left-wing Alliance party describing the takeover bid as "cultural imperialism".

"The sell-off of our media is more insidious in some ways than the sale of land, because media moguls sitting in offices overseas make decisions about the information we receive here," said Alliance spokeswoman Pam Corkery.

However, Independent has gone to great pains to reassure New Zealanders about editorial independence at Wilson & Horton, and deputy chairman Mr Meagher said an advisory board of New Zealanders, chaired by former All Blacks captain Wilson Whineray would be established to ensure the needs of the communities served by W&H enterprises were fully served. Independent operates a similar advisory board in its South African media operations, he added.

Independent has also defended the pricing of its bid despite suggestions by local analysts that the NZ$10.50 (£4.40) per share offer may be too low to ensure success. The chairman of the IPCL takeover vehicle, Michael Walls, said that the NZ$10.50 offer is considerably higher than any price at which W&H has ever traded, even allowing for the NZ$1.50 special dividend paid in May 1995.

On the first day's trading in W&H since the takeover was announced, the shares traded up to NZ$10.70, before settling back to NZ$10.50. Trading was thin, and given the half-year dividend that would he included in the current W&H share price, last night's closing price does not suggest that the New Zealand stock market expects Independent to have to go higher.

The price is equivalent to that paid to Brierly Investments when Independent took its initial 28 per cent stake in W&H in May last year. The offer price corresponds to a multiple of 20.5 times the concensus after-tax earnings forecast for the year to the end of next December.