Shareholders in Nine Entertainment are to be given initial details of some key parameters of the planned float over the next few days as the marketing of the year's largest sharemarket float moves into full swing.
As part of the float, Nine Entertainment is expected to raise $275 million in fresh capital which will be used to reduce borrowings to about $600 million - or about twice the level of the company's gross profit, as measured by earnings before interest, tax, depreciation and amortisation, of around $305 million.
Additionally, some of Nine's existing shareholders are expected to sell down a portion of their shares into the issue.
At this stage it is expected that an additional $500 million to $750 million worth of shares in the company could be available for sale through this share facility.
If the full amount of the expected $750 million worth of shares are put forward for sale through this facility, it would bring the total size of the capital raising to about $1 billion, which would rank the Nine float as the largest seen in the local market for several years.
Securities analysts with investment banks handling the initial public offering have valued Nine at between $2.5 billion and $3 billion, sources close to the planned issue said on Sunday.
Nine Entertainment's key shareholders, with a controlling 54 per cent holding in the broadcaster, are expected to sell about a third of their holding, sources said, signalling they could emerge with a 35-40 per cent stake in the company after it is listed.
A key focus at this stage is seeking to ensure the share price remains well supported once trading commences on the sharemarket, to support post-listing valuations.
The existing timetable is expected to see the prospectus registered in two weeks, with shares in the company to be listed on the sharemarket for trading on December 6, about a week later than originally hoped.
Existing holders are likely to be given a likely price range for the float in a week's time, once the initial response of prospective local and international institutional investors to the offer details is known.
Nine is to hold its annual meeting on Monday with shareholders to vote to split the number of shares on issue from 200 million at present to 800 million.