Independent News and Media’s $3.8 billion takeover bid for APN News and Media Limited may have hit a hurdle.
The Board of APN had agreed yesterday to recommend an increased offer of $6.10 per share for all the shares in APN from Tony O’Reilly’s consortium comprising Independent News & Media PLC (35 per cent), Providence Equity Partners (37.5 per cent) and The Carlyle Group (27.5 per cent).
But today there are reports that Perpetual, which holds a 14.82 per cent interest in APN, will reject the $6.10 offer.
Another shareholder, Maple Brown Abbott, holds an 8.14 per cent stake, which, if combined with Perpetual, could create a potential blocking stake of 23 per cent.
Under a scheme of arrangement offer as proposed by INM, a minimum 75 per cent shareholder approval is needed to get the deal across the line.
The APN subcommittee that negotiated with the consortium was chaired by Ted Harris and its other members were Sir Wilson Whineray and Kevin Luscombe.
Harris says the committee recommends that shareholders vote in favour of the offer in the absence of a superior proposal.
“After negotiating the increase from the initial proposal of $6.02 per share to a final offer of $6.10, the independent committee has formed the view that the increased offer is in the shareholders’ best interests and we recommend all shareholders vote in favour of the proposal.”
“The committee has no doubt that if the offer falls away the price of APN shares will fall appreciably.”
APN shares fell 7c to $5.98 yesterday.
The consortium has indicated that it has no plans to change existing management.
APN shareholders (other than INM, Providence, The Carlyle Group and their associates) will be asked to approve the Scheme at a shareholders’ meeting expected to be held in late April 2007.
APN owns half the Australian Radio Network, which operates Gold format and MIX format stations in Australia and a range of formats in New Zealand. APN also owns the New Zealand Herald, a mass of regional titles in Australia, and a large outdoor media business.