O’Reilly fails again to take APN private

TONY O’REILLY has failed for a fourth time in his bid to take Australian media company APN News and Media private in a move which would have delivered a 375 million boost for Independent News and Media Plc’s (IN&M) coffers.

APN News & Media Ltd’s shareholders rejected a A$1.9 billion (1.158bn) bid and led by O’Reilly’s IN&M, supported by private equity partners Carlyle Group and Providence Equity Partners.

Despite losing out on the cash bonanza Goodbody analyst Peter Gunn said the failure to unlock resources to fund continued global expansion is a disappointment.

“We note that IN&M still has ample firepower to fund deals in attractive emerging economies such as India. We believe that IN&M could pay up to 500m for deals,” he added.

A total of 49% of votes cast opposed the A$6.20-a-share cash bid, which needed 75% support to succeed, under takeover rules that the Irish Independent could not vote its 38.5% stake.

IN&M chief operating officer Gavin O’Reilly told reporters: “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.”

Despite the collapse of the bid O’Reilly Jnr described the bid as “a very full price by international standards, although I appreciate that the Australian capital markets do seem to be at dizzy heights”.

O’Reilly said the setback would not impact IN&M’s expansion plans and there were no plans to sell down the APN stake.

About 80% of shareholders supported the offer, which was voted down by APN’s institutional shareholders. The bid’s prospects sank on May 21, when Perpetual Investments, the biggest shareholder, said it wouldn’t accept the deal.

NCB stockbrokers Tricia McEvoy said: “IN&M will remain a 40% shareholder in APN and an alternative bid for the group is unlikely to materialise given the large stake owned by IN&M. The IN&M consortium had declared its bid of A$6.20 as final and therefore cannot make a higher bid for the group at this time.”

Merrion stockbrokers’ Gavin Kelleher said the failure of the deal at the current level should not have any major impact on IN&M’s valuation.

“The deal was primarily a capital restructuring and was earnings neutral in the short term.”, he added.

A number of analysts have noted that APN remains significantly undergeared and can easily draw down large debt to fund its participation in the M&A wave of activity that is currently sweeping Australia following the liberalisation of media laws there this year.