Sir Anthony O'Reilly has suffered a big setback in Australia after investors in media group APN thwarted a 1.93 billion Australian dollars (€1.19 billion) bid by Independent News & Media to take the business private, writes Arthur Beesley,Senior Business Correspondent.
As the market digested news that APN shareholders had voted at an extraordinary general meeting in Sydney to reject the bid, Independent declared that it had spent €28 million buying up 1 per cent of its own shares.
The manoeuvre was immediately characterised by dealers in Dublin as an effort to block billionaire businessman Denis O'Brien from adding to his 7 per stake in the business. Asked if that was so, a spokesman for Independent said: "A tranche of shares, about 1 per cent, became available and the company felt it was an appropriate investment that reflected confidence in the business."
Shares in the group finished up by 18 cent at €3.69 last night, almost 8 cent less than the €3.77 price at which it acquired stock yesterday through Davy Stockbrokers. Independent's attempt to take APN private was in gestation for eight months, a period in which it formed two consortiums to make bids and raised its offer price on three occasions.
One of the largest regional publishers in Australia, APN also owns the New Zealand Herald and over 110 radio stations in New Zealand. Independent had hoped to realise as much as €375 million in cash from a transaction in which it was to be a buyer and seller of APN shares.
While a special distribution of cash to shareholders was on the cards, the group was also expected to use the proceeds for acquisitions. "Of course we are disappointed. We are going to look at all our options, we are in no hurry to do anything at this point," chief operating officer Gavin O'Reilly said in Sydney.
APN said 51 per cent of all voters backed the deal, significantly below the 75 per cent majority required to give effect to scheme of arrangement with which Independent was to acquire the group with private equity groups Providence and Carlyle. The bid was backed by 80 per cent of shareholders by number.
The group said the deal would have succeeded if it received support from Perpetual Investments, which had voting power of 11.7 per cent and had signalled that it was preparing to reject the transaction. Eight other institutions voted against the bid and 24 supported it, APN said.
While Australian takeover rules prevent Independent and its partners from mounting a fresh bid, it remains unclear whether Sir Anthony will be minded to form a new consortium. Equally unclear is whether Independent might seek to use its 38.5 per cent stake in APN to raise cash by selling APN assets.
Mr O'Reilly said that it would be premature to discuss alternatives at this point. He said the consortium members held discussions with Perpetual. "It was the job of the consortium to go out and try to sell the bid and we believe we have done a good job."
Quoted by Australian media as saying "I watch with great interest the Lazarus-like resurrections of deals down here", Mr O'Reilly said in a market statement that Independent would "continue to review the many op- portunities that arise in the exciting Australasia media scene".
Goodbody analyst Philip O'Sullivan said: "The glass half-full argument would be that the rejection of the A$6.20 a share offer highlights the value of the firm's investment in that market.
"While this is true, the failure to unlock resources to fund continued global expansion is a disappointment, but we note that INM still has ample firepower to fund deals in attractive emerging economies such as India."
