APN exit NZME, focus on Australian Radio & Outdoor

It has been a big morning for APN News & Media, as new CEO Ciaran Davis puts his stamp on the future of the business.

APN has announced this morning that it will demerge 100% of NZME from the APN business, and list the company (NZME) separately on the ASX and the NZSX.

APN also announced that it is entering into talks with Fairfax Media to merge their collective New Zealand print assets.

The demerger of NZME, which operates the New Zealand Herald and a group of radio stations including NewsTalk ZB, ZM, Hauraki and The Hits, will create two completely separate companies:

• APN – a media and entertainment company consisting of the Australian Radio Network, Adshel, and Cody Outdoor.
• NZME – an integrated media and entertainment business in New Zealand, operating across publishing, radio and digital.

APN CEO Ciaran Davis said:

“The Demerger will allow APN to drive growth and investment across the two outperforming media sectors in Australia, radio and outdoor. It presents a significant opportunity for APN to capitalise on our leading media brands and market positions, with radio and outdoor a strong natural fit for integrated advertising campaigns.

CEO of NZME Michael Boggs commented:

“With our experienced management team in place, NZME is well positioned to continue its transition across to digital advertising and new revenue streams from transaction and experiential channels. We will be independently structured and funded to capitalise further on the changes we are making.”

Each company will have it’s own separate board, and the senior executive teams in place currently will not change.

In related news, Fairfax Media and NZME are formally in discussions to merge their New Zealand businesses:

Fairfax CEO and Managing Director Greg Hywood said:

“This is an important opportunity for all of our shareholders to be part of the future of content and journalism in New Zealand. The merger would enhance the position the businesses are in to continue to deliver high quality, local content to audiences now and in the future.”

APN CEO Ciaran Davis added: “Along with the other initiatives APN announced this morning, the merger of NZME and Fairfax’s NZ business provides an exciting opportunity for our shareholders, particularly our New Zealand shareholders, to participate in the creation of a leading media business for New Zealanders.”

The end result, should the merger of Fairfax and NZME eventuate, and should APN shareholders approve the demerger, is:

• APN will reduce net debt significantly, and position it strongly for media acquisition activity in Australia.
• NZME will be a separate entity with a separation from ARN.
• The creation of a merged print entity in New Zealand covering the country.
• APN will have limited exposure to the structurally challenged print sector with investments focused in the strongly performing radio and outdoor sectors.

Pending shareholder and regulatory approvals the activity is intended to be completed by December.