INDEPENDENT News & Media said yesterday that it would hold a reduced stake in Australian media group APN following that group's capital raise.
APN News & Media is taking full control of its radio businesses from US-based Clear Channel and launching a capital raising of A$132m (about €87m) to finance the acquisition.
The unit being bought by APN owns 17 radio station brands in Australia and New Zealand and has 5.7 million listeners a week. While most shareholders will take part in the capital raise, INM said it would prefer to spend the money on its Irish operations.
That decision means that INM's 29pc stake will be diluted to 18.6pc.
"Having recently concluded a substantial restructuring and strengthening of its balance sheet, including a significant equity issue, INM's priority objective at this time is to retain the operational flexibility necessary to reposition its operations for an improvement in Ireland's evolving media market," INM said in a stock exchange announcement.
Shares in INM were unchanged on the Dublin and London stock markets yesterday afternoon.
"Accordingly, and given APN's capital raise timetable and the fact that INM's participation would require a further significant capital raise from its shareholders, INM will not be participating in APN's proposed equity issue."
INM said that it remained "fully supportive" of APN's strategy.
Davy Stockbrokers said in a note to investors that the decision made sense.
"Full participation would have cost INM in excess of €20m and in all likelihood would have required it to raise equity itself," analyst Simon McGrotty said.
Businessman Denis O'Brien – who is the largest shareholder in INM – will separately underwrite the APN capital raise.
This will result in Mr O'Brien increasing his stake in Australian media group APN to a little more than 11pc through his investment vehicle Baycliffe.