Nine boss gets $17m sling for saving ship
Nine Entertainment chief David Gyngell, the man credited with saving the group from collapse last year, is being rewarded accordingly with $17 million worth of cash and shares when the company floats on the ASX next month.
While the vesting of his performance rights ties Mr Gyngell to the network for three years, he played down concerns he would then head for the exit after nearly two decades with the network.
"I love what I'm doing, and three years is what they offered me," Mr Gyngell said. "Whether short-sighted or not, this is it for me."
Nine released its prospectus for the initial public offering on Monday, confirming that up to $700 million worth of shares - about a third of the company's issued capital - will be for sale at $2.05 to $2.35 a share.
It puts a price tag of up to $2.2 billion on the group, which includes the Nine television network, Ticketek, and Sydney's Allphones Arena.
Most of the proceeds will be going to shareholders selling down their investment, but $300 million will be raised from the issue of new shares to pay down debt to a net $600 million, and add to working capital.
The two hedge funds which in effect control Nine, Apollo Global Management and Oaktree Capital, will keep a combined 36.3 per cent stake in escrow until the release of Nine's full year results for 2014 - a partial sell-down is allowed in February under certain conditions.
Nine's other shareholders will have a combined 30.2 per cent of the company after the float, which they can sell at any time.
According to the prospectus, Nine will report revenue of $1.57 billion for the year to June 30, generating earnings before interest, tax depreciation and amortisation of $305 million and a net profit of $139.5 million.
Mr Gyngell, whose $17 million IPO payday will be on top of his annual remuneration up to $4 million in base pay and short term incentive bonuses, is among the executives who will have incentive to stick around after the float.
The media group's senior ranks will share more than $10 million in Nine shares as performance rights, which vest over three years starting from December 2014.
Mr Gyngell gets more than half of this. His performance rights are valued at just under $5.5 million.
From the float, he receives a further $10 million worth of shares under escrow for three years, and a $2.5 million cash bonus.
Mr Gyngell was instrumental to the deal that saved the group from collapse last year - which saw lenders swap $3.4 billion worth of debt for 95.5 per cent of the equity in Nine - but it had the unintended effect of crystallising millions in losses for Nine's management when the restructure was executed. The shares had been worthless for years thanks to Nine's poor performance.
In the frame
Indicative market value up to $2.17b
Shares on issue post float 931m
Shares to be sold in IPO 305m
Profit forecast 2013-14 $140m
Forecast final dividend for 2013-14 4.1¢
Shares begin trading December 6