Rumour INM to sell off APN

INDEPENDENT News & Media (INM) isrumoured to be strongly considering the sale of its 32.2% stake in Australian media group APN.

A report in the leading Australian business newspaper, the Australian Financial Review, has suggested INM is taking on an adviser to manage the sale of the stake.

Last year, INM targeted the sale of its Australasian interest as a means of reducing debt levels but later admitted a deal could not be reached as a suitable buyer, able to finance a bid, could not be found. Since then, however, INM chief executive Gavin O’Reilly, who also acts as APN’s chairman, has said the Irish group was now viewing the investment in the Sydney-headquartered group as a long-term strategy.

With regard to speculation suggesting the opposite, an INM spokesperson said the reports were “unfounded“.

“INM’s position vis-a- vis its 32.2% strategic stake in APN remains unchanged and INM has not appointed any advisers in relation to APN. The company’s focus is on successfully completing the rights issue, which closes on Monday,” the added.

In a research note on INM, Goodbody Stockbrokers’ Gerry Hennigan wrote: “Post restructuring we estimate the proportion of INM’s full year 2010 revenue and operating profit from the region of 48% and 60%, and hence any sale will have a meaningful impact on the model. Such a move, however, would clearly be undertaken to reduce debt, which despite the re-structuring we forecast will amount to €911 million at the end of 2010.”

APN’s management recently told an investor presentation that the business is on course to report an operating profit for the current year of between AU$180m (€112m) and AU$190m.

Analysts also recently forecast that INM’s shareholding in APN should be worth around €272m if the Australian-based group meets its full-year financial targets.