- Share this article on Facebook
- Share this article on Twitter
- Share this article on Flipboard
- Share this article on Email
- Show additional share options
- Share this article on Linkedin
- Share this article on Pinit
- Share this article on Reddit
- Share this article on Tumblr
- Share this article on Whatsapp
- Share this article on Print
- Share this article on Comment
SYDNEY– Nine Entertainment Co, the parent company of Australia’s second-highest rated TV broadcaster, the Nine Network, aims to raise up to $680 million (AUS$716 million) through an initial public offering, the company confirmed Monday.
304 million shares in the company will be offered to institutional and general investors with a price range of $1.95 to $2.23 per share, giving the entertainment giant an expected market capitalization of up to $2.06 billion, according to the prospectus. It is expected to be the largest Australian media IPO ever.
STORY: U.S. Investment Firms Take Control of Australia’s Nine Entertainment
Ratings agency Moodys Investor services said today that it was giving the company a Ba2 credit rating. “NEC has a solid track record of strong audience and revenue share as well as a good degree of diversification across different advertising channels. Nevertheless NEC faces strong competition from other Free to Air networks which could impact on margins depending on the success of future content. We expect growth in advertising revenue over the next 1-2 years to be slow and gradual,” the agency said.
NEC operates three divisions here: the Nine TV network, Nine Events, which operates the Ticketek ticketing service, Allphones Arena and Nine Live; and Nine Digital and Ventures, which runs Mi9, an online portal that was a joint venture with Microsoft.
In the company’s prospectus, Nine chairman David Haslingden said the group generated $1.42 billion in pro forma revenues, issued more than 22 million tickets for live events in Australia and New Zealand, and currently attracts approximately 10.5 million unique monthly visitors to its Mi9 online network.
Taking the company public will allow key investors including U.S. hedge funds Oaktree Capital and Apollo Management to realize some returns after backing a debt to equity swap in January this year and saving the company from receivership after it was drowning in $3.6 billion of debt.
STORY: Nine Network Australia Managing Director Jeffrey Browne Steps Down
According to local reports, Oaktree Capital Group will sell almost half of its 26 percent stake, while Apollo Global Management plans to initially keep its 28 percent stake. Post IPO, new investors will hold 33 percent of NEC.
Proceeds of the float will be used to pay down some of the company’s debt and, according to CEO David Gyngell, “a listing on the ASX will help us to continue our strong momentum and consolidate our position as a leading FTA [free-to-air] TV network in Australia, maintain our strong industry position and expand the Nine Events business, and continue to grow Mi9 and our other digital media assets. We look forward to welcoming our new shareholders.”
Nine has made several key acquisitions this year in preparation for the IPO, including purchasing the two capital city TV stations it did not own in Perth and Adelaide, paying a record TV and digital media rights deal to broadcast international and domestic cricket here, and buying out joint venture partner Microsoft from its stake in Mi9.
Gyngell is set to net over $16 million in cash and shares when the company floats, in addition to his salary and incentive package worth around $4 million. Gyngell, a former Granada USA CEO and the son of the first man to appear on Australia television Bruce Gyngell, was widely credited with rescuing NEC from insolvency last year, negotiating its recapitalization with Oaktree and Apollo.
Sign up for THR news straight to your inbox every day