Assets Could Be for Sale
By VAUGHAN, Gareth; STEEMAN, Marta
Canada’s CanWest Global may need to sell its Kiwi and Australian television and radio interests if it proceeds with a bid for a Canadian television group.
CanWest Global said in October that it was reviewing its 70 per cent shareholding in a stable of New Zealand media assets, including TV3, music channel C4, its radio business, with stations such as More FM, The Breeze and The Edge, and its 56% stake in Australia’s Ten Network.
Now, Canadian media reports say, CanWest Global has teamed up with the private equity unit of investment bank Goldman Sachs to bid up to $C2.1 billion ($NZ2.6b) for Alliance Atlantis Communications (AAC).
Given CanWest Global’s $C2.7b debt, some analysts predict the Winnipeg firm would proceed with the AAC offer only if it sells its New Zealand and Australian assets.
Big Australian media players have been bulking up to seize opportunities in the huge shake- up expected to follow the liberalisation of Australian media ownership laws this year.
Contenders lining up for media assets include media mogul Kerry Stokes, who has created a $A4b ($NZ4.6b) war chest with United States private equity partner Kohlberg Kravis Roberts and fellow mogul James Packer, who in October announced a $A4.5b joint venture with private equity group CVC Asia Pacific.
Their targets are speculated to be CanWest’s New Zealand and Australian businesses, Fairfax Media, publisher of The Press, in New Zealand, plus APN News and Media, controlled by Irish media mogul Tony O’Reilly.
Late last month, British media reported O’Reilly had his own plans for APN, teaming with private equity partners to take over all of it.
Last month, Fairfax Media landed its own deal that analysts said should make it less vulnerable to takeover from media moguls.
It announced a merger with Australia’s Rural Press to form a $A9b publishing and digital media group.
Two years ago, rumours swirled in Australia that Fairfax Media was in talks with CanWest Global about buying its 56% stake in Ten Network. A few weeks later, CanWest Global squashed the speculation, saying Ten Network was not for sale.
Then, in October, CanWest Global hired Citigroup to advise on options for its Australasian assets before this year’s liberalisation of Australian media ownership laws.
CanWest Global has said it is evaluating all possible options for its Australasian assets.
These include the status quo, acquisition, full or partial sale, merger and combining the New Zealand and Australian businesses.
Goldman Sachs J. B. Were analyst Rodney Deacon says given the actions of CanWest Global, CanWest New Zealand is a clear merger and acquisition target.
Based on recent media transactions, Deacon estimates CanWest New Zealand shares could be worth between 245c and 260c each.
They closed yesterday at 219, down 1c.
(c) 2007 Press, The; Christchurch, New Zealand. Provided by ProQuest Information and Learning. All rights Reserved.