APN directors 'lost confidence' of largest shareholders
The independent directors, lead by chairman Peter Hunt, are expected to decide their future this week.
The embattled media group went into a trading halt on Friday after reports emerged APN's largest shareholder, Ireland-based Independent News & Media, and its billionaire backer Denis O'Brien, had "lost confidence" in APN chief executive Brett Chenoweth who was proposing a capital raising to pay down debt.
"The reason for the trading halt is to prevent trading taking place in a speculative or uninformed market while APN investigates INM's comments and completes its deliberations about a potential capital raising," APN said on Friday.
APN said the non-IN&M directors on APN's board unanimously supported Mr Chenoweth as CEO and the plans to reportedly raise $100 million.
The financially challenged INM is not expected to be in a position to participate in the raising and would face a significant dilution of its stake in APN, according to a report in the UK newspaper The Sunday Times.
Funds manager Allan Gray, which owns 19.8 per cent of APN has sided with INM and the two parties have requested an extraordinary general meeting to remove Mr Chenoweth as CEO and spill the board. This is expected to result in the removal of the independent directors.
The board reconvenes this morning and needs to sign off on APN's financial accounts before the announcement of its financial results on Thursday.
In December, APN said it expected net profit before exceptional items for the 2012 calendar year to come in around $51 million. This would represent a decline of up to 34 per cent from the $78 million underlying net profit for last year.
APN owns outdoor advertising, radio stations and newspapers in Australia and New Zealand. Its shares last traded at 30 cents.
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APN put its shares into a trading halt after reports that its biggest shareholder, Ireland-based Independent News & Media (INM) and backer Denis O'Brien, said they had "lost confidence" in CEO Brett Chenoweth over his proposed capital raising to pay down debt. APN said the halt was to prevent speculative or uninformed trading while it investigates INM's comments and considers the potential capital raising.
The article names Independent News & Media (INM) and its backer Denis O'Brien as APN's largest shareholder interests that lost confidence in management. Funds manager Allan Gray, which owns 19.8% of APN, has sided with INM and together they have requested an extraordinary general meeting to remove the CEO and spill the board.
Management was reportedly planning a capital raising of about $100 million to pay down debt. The financially challenged INM is not expected to be able to participate and would face significant dilution of its stake if the raising proceeds, which is a key reason for the dispute with management.
Allan Gray and INM have requested an extraordinary general meeting (EGM) to remove CEO Brett Chenoweth and to "spill" the board. If successful, this is expected to lead to the removal of the independent directors who currently support the CEO, changing APN's board composition.
The board reconvened to sign off on APN's financial accounts before the announcement of its financial results later in the week. The six independent directors, led by chairman Peter Hunt, are described as being in an untenable position and are expected to decide their future this week.
APN said in December it expected net profit before exceptional items for the 2012 calendar year to be around $51 million, a decline of up to 34% from the $78 million underlying net profit reported the previous year. The article also notes APN shares last traded at 30 cents.
APN owns outdoor advertising, radio stations and newspapers in Australia and New Zealand. For investors, that means APN's performance is tied to advertising markets and media operations across those regions—context that matters when assessing the impact of debt, capital raising and management changes.
Investors should monitor whether the extraordinary general meeting proceeds and its outcomes, any decisions on the proposed $100 million capital raising, the board's sign-off of financial accounts and the upcoming financial results announcement, and any updates that end the trading halt or change board leadership.
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