Businessman Denis O'Brien increasing his stake in Australia's APN to 11pc
Stake increased through his backing of APN's buyout of radio business Clear Channel
Businessman Deinis O'Brien is increasing his stake in Australian media group APN to just over 11pc.
He has increased the stake in APN, in which Independent News & Media is also a shareholder, from 1.5pc through his backing of a buyout of Australian radio business Clear Channel - a long-standing partner of APN.
The Australian media group is boosting its investment in radio by buying out the assets.
INM announced today it would not participating in APN’s proposed equity issue.
Investor Allan Gray is also supporting the buyout.
Mr O'Brien's increased shareholding is through his investment vehicle Baycliffe.
The move will result in INM’s stake in APN being reduced to about 18.6pc as the company focuses its attention on retaining the operational flexibility necessary to reposition its operations for an improvement in Ireland’s evolving media market.
However, it remains committed to the investment in APN, it added.APN said last night that it bought out US-based Clear Channel’s stake in a radio unit jointly owned by the two companies for A$246.5m (€161.5m) using bank borrowings.
It will repay those borrowings with a capital raise of $132m, borrowings of another A$61m and the use the A$60m proceeds from the recent sale of an outdoor advertising unit.
The move boosts APN’s reliance on radio and reduces the company’s dependence on newspapers which are also an important part of the company’s business.
It also leaves APN as the owner of the largest network of radio stations in Australia and New Zealand with a combined listenership of 5.7 million listeners each week.
The radio stations “are businesses that we know extremely well, having run them for almost 20 years,” APN chief executive Michael Miller said last night.
“They are managed by highly competent teams and continue to deliver growth in both audience numbers and advertising revenues.”
APN said in a separate statement yesterday that EBITDA from continuing operations and before exceptional items jumped 8pc to A$162.8m last year while sales were down slightly at A$817.2m.
The long-standing partnership between APN and Clear Channel in Australia remains through their relationship in the Adshel and Hong Kong Outdoor advertising businesses.
APN said yesterday that it remains committed to strengthening its balance sheet and is targeting the generation of operating cash flows of A$60m to A$70m in 2014 to pay down debt.