APN shares surge, putting Kiwi assets in spotlight

SHARES in publisher APN News & Media, the owner of The New Zealand Herald and a series of Australian regional titles, surged nearly 25 per cent yesterday, sparking speculation a review of the company's Kiwi assets may have found a buyer.

By InvestSMART · 3 Oct 2012

By InvestSMART ·
3 Oct 2012

Comments

The company's chief executive, Brett Chenoweth, put the assets on the block in May, hiring Deutsche Bank to advise on a strategic review after receiving approaches from potential buyers.

APN, which also owns a suite of magazine and radio assets in New Zealand, told shareholders in May approaches had concerned "some or all of our New Zealand assets".

Shares in APN have fallen heavily this year along with other traditional media companies. But, in turnover twice the daily average yesterday, APN shares shot up 8.5?, or 24.6 per cent, to 43?.

The stock was the biggest mover on the S&P/ASX 200 today.

Mr Chenoweth told shareholders in May the media group, which also owns a stake in The Radio Network (which includes Newstalk ZB, Radio Hauraki and Classic Hits), was reviewing all of its New Zealand media assets.

"In recent months, APN has identified a number of opportunities and at the same time received approaches in relation to potential transactions," he said at the time.

In August, the market savaged the stock after it confirmed that the chief financial officer of a decade, Peter Meyers, would leave the company, with APN's share price plunging 26.9 per cent to 28.5?. The company's market value was cut to as low as $185 million.

At its recent full-year result, APN posted a net loss of $319.4 million, 225 per cent greater than the previous corresponding period.

Go to Google News, then click "Follow" button to add us.

Share this article and show your support

Frequently Asked Questions about this Article…

Why did APN News & Media shares surge nearly 25%?

APN shares jumped after speculation that a strategic review of its New Zealand assets may have found a buyer. The company’s CEO, Brett Chenoweth, put the Kiwi assets on the block in May and hired Deutsche Bank to advise on a review after receiving approaches from potential buyers, which drove heavy trading and a sharp price rise.

What New Zealand assets does APN News & Media own that are under review?

APN owns The New Zealand Herald, a suite of magazines and radio assets in New Zealand, and a stake in The Radio Network (which includes stations such as Newstalk ZB, Radio Hauraki and Classic Hits). These Kiwi assets were the focus of the strategic review mentioned by the company.

How big was the trading and price move when APN shares surged?

Trading was unusually heavy — turnover was about twice the daily average — and APN was the biggest mover on the S&P/ASX 200 the day of the surge, with the stock rising roughly 24.6% in that session.

How has APN’s share price behaved this year and what caused the volatility?

APN shares have fallen heavily this year in line with other traditional media companies. The stock has been volatile due to factors such as the company’s strategic review of New Zealand assets, market reactions to management changes, and large reported losses.

Did any management changes affect APN’s share price recently?

Yes. In August the market reacted strongly when APN confirmed the departure of long‑time chief financial officer Peter Meyers. The share price plunged about 26.9% on that news and the company’s market value was cut to as low as $185 million.

What recent financial results did APN report that investors should know about?

At its recent full‑year result APN reported a net loss of $319.4 million, which was 225% greater than the previous corresponding period, a result that helps explain investor concern and stock weakness earlier in the year.

What role did Deutsche Bank have in APN’s strategic process?

APN hired Deutsche Bank in May to advise on a strategic review of its New Zealand media assets after the company received approaches from potential buyers, according to statements made to shareholders.

As an everyday investor, what should I watch for next on APN News & Media?

Watch for official announcements about any sale or transaction involving APN’s New Zealand assets, updates from management on the strategic review, and subsequent financial results or guidance. Also consider the company’s recent net loss, past management changes, and the clear volatility in the stock when assessing risk.