Hedge fund backers of Nine float may pull out, investors warned
But it has also warned investors who are keen to participate in its coming sharemarket float that its major financial backers - the US hedge funds Apollo Global Management and Oaktree Capital Group - may want to sell their remaining stake from the middle of next year.
If that were to happen, the company's share price might take a hit.
Nine Entertainment Company (NEC), the owner of Channel Nine, has been preparing to float on the stock exchange for months.
The group plans to list on December 6 with a market capitalisation of up to $2.2 billion after selling 304.7 million shares at $2.05 to $2.35 each.
A prospectus for the float was issued last Monday and potential retail investors have been gearing up for the initial public offer on Tuesday.
But on Friday, the media company lodged an amended prospectus with the Australian Securities and Investments Commission. The amendments were made at the request of the corporate regulator.
Among the changes was information regarding Nine Entertainment's future growth strategy in light of possible changes to the law.
"NEC will consider specific merger and acquisition opportunities that arise having regard to the circumstances prevailing at that time," the new prospectus says.
"For example, in the event the 75 per cent audience-reach rule is materially amended or removed, the free-to-air TV industry could potentially experience consolidation. In that event, Nine Network would consider all of its options in light of market conditions and the actions of its competitors ... which may potentially involve NEC engaging in a merger or undertaking acquisitions."
A Nine spokesman said the amendments were made in response to questions raised by ASIC "in the ordinary course of ASIC's review of the prospectus" and they "did not consider the changes material."
New information regarding possible merger and acquisition activity "was made in response to a query raised by ASIC having regard to the media speculation on this topic," the spokesman said.
The warning about a possible impact on the share price - when Apollo and Oaktree may choose to sell their remaining stake in the company after the publication of NEC's full year results on 30 June 2014 - was given more prominence.
"It was repeated in the earlier section of the prospectus to give it more prominence as requested by ASIC," the spokesman said.
Frequently Asked Questions about this Article…
Nine Entertainment's stock market float is significant because it marks the company's transition to being publicly traded, with a market capitalization of up to $2.2 billion. This move allows everyday investors to buy shares and potentially benefit from the company's growth.
Nine Entertainment Company is planning to float on the stock exchange with a market capitalization of up to $2.2 billion. They aim to list on December 6 by selling 304.7 million shares priced between $2.05 and $2.35 each.
Nine Entertainment's share price might be affected if its major financial backers, Apollo Global Management and Oaktree Capital Group, decide to sell their remaining stake. This could lead to a decrease in share price due to increased supply in the market.
The major financial backers of Nine Entertainment Company are the US hedge funds Apollo Global Management and Oaktree Capital Group.
The prospectus was amended to include information about Nine Entertainment's future growth strategy, particularly in light of potential changes to Australia's audience-reach laws. These changes were made at the request of the Australian Securities and Investments Commission (ASIC).
If Apollo and Oaktree decide to sell their remaining stake in Nine Entertainment, it could potentially lead to a decrease in the company's share price.
If Australia's audience-reach laws are materially amended or removed, it could lead to industry consolidation. Nine Entertainment may consider mergers or acquisitions to expand its reach and adapt to new market conditions.
If Australia's audience-reach laws are amended or removed, Nine Entertainment may consider mergers or acquisitions, potentially leading to industry consolidation.
Apollo Global Management and Oaktree Capital Group are major financial backers of Nine Entertainment. Their decision to sell their remaining stake in the company could impact the share price and investor confidence.
Nine Entertainment made amendments to its prospectus in response to questions from the Australian Securities and Investments Commission (ASIC), including information about future growth strategies and potential mergers or acquisitions.
Nine Entertainment is expected to list on the stock exchange on December 6, offering 304.7 million shares priced between $2.05 and $2.35 each.
The amendments to Nine Entertainment's prospectus were made at the request of ASIC during their review process, and the company did not consider these changes to be material.
The amendments to the prospectus were prompted by questions from ASIC during their review process. These changes were made to address media speculation and provide clarity on Nine Entertainment's potential merger and acquisition activities.
Apollo and Oaktree may choose to sell their remaining stake in Nine Entertainment after the publication of the company's full-year results on June 30, 2014.
Investors should consider the potential impact of Apollo and Oaktree selling their stakes, the company's growth strategy in response to possible law changes, and the overall market conditions. It's important to review the prospectus carefully and assess the risks involved.
If the 75% audience-reach rule is materially amended or removed, Nine Entertainment would consider all options, including mergers or acquisitions, based on market conditions and competitor actions.
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