Australia's Nine Entertainment Co. Valued at $1.77 billion With IPO

David Gyngell
David Gyngell
 Getty

SYDNEY - Nine Entertainment Co., the parent of the Nine television network in Australia, has set a final price of AUS$2.05 ($1.85) per share for its IPO, with the stock scheduled for listing on the Australian Stock Exchange Friday.

$1.85 per share will give the company a market capitalization of $1.77 billion, at the lower end of expectations when the float was announced in November. Nine was marketing the shares in a price range of $1.85 - $2.14.

NEC will raise around $581 million from the IPO. U.S. hedge fund Oaktree will reduce its stake in NEC from 27.8 percent to 14.3 percent following the float, while Apollo will move from 25.6 percent to 22.0 percent.

"We are delighted by the strength of demand received for our IPO across both high quality domestic and international investors, with the offering multiple times covered at the Final Price. I look forward to welcoming our new shareholders,” NEC CEO David Gyngell said in a statement.

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The market capitalization makes NEC, which also includes a ticketing company, digital assets and Allphones Arena, the third largest media company in Australia behind News Corp Australia and Seven West Media. The IPO values NEC at about 8.3 times estimated earnings before interest, tax, depreciation and amortization for the 12 months through June 2014, including debt, according to the statement.  

Nine forecast revenues of $1.42 billion for the year ending June 30, 2014, and Ebitda of $275 million, in its prospectus.

Nine finished the official TV ratings year last week in second place behind the Seven Network, with an overall 28.6 percent audience share to Seven’s 30.7 percent share. But Nine won all of the key demographics including the coveted 25 – 54 year olds, increasing its audience by over 1.4 share points across key demographics.

The Voice Australia, which aired on Nine from April, was the top rating regular program on Australian television this year, averaging over 2 million capital city viewers for its Sunday and Tuesday episodes.

 

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