Nine is still not the one in TV battle
The detailed projections will allow investors to make reasonably accurate performance comparisons between Seven and Nine. Nine's current share of advertising revenue is about 2.5 percentage points less than Seven.
Nine's margins, which have been running at about 18 per cent, are forecast to be at more than 20 per cent in the prospectus, which will also suggest that its cost base remains higher. About $700 million worth of shares are expected to be sold in the initial public offering, making it Australia's largest float since 2010.
Nine is expected to sell about $275 million in newly issued shares to pay down debt to about $600 million. The rest of the shares up for sale will be sourced from current shareholders who took ownership of Nine in February after swapping their debt for equity in the company.
Current investors were given an indicative price range of $2.05 to $2.30 for their shares, which will be reflected in the pricing of the IPO.
At this price, Nine will have a market value of about $2 billion when it lists next month, or an enterprise value of $2.6 billion including debt.
The February restructure effectively valued Nine at $2.3 billion, based on forecasts at that time of $250 million in earnings before interest, tax depreciation and amortisation (EBITDA) for the 2012-13 financial year, a multiple of 9.2 times earnings.
Nine is expecting EBITDA to rise to about $300 million this year, with $235 million to $240 million of this generated by its television business, boosted by the acquisitions of Nine Adelaide and Perth.
Despite a pick-up in consumer confidence, and the recent federal election, media executives have reported little sign of a turnaround in the industry with advertising sales continuing to be short.
Insiders have said Oaktree Capital Group, one of Nine's largest investors, will sell almost half of its 26 per cent stake, while Apollo Global Management plans to initially keep its 28 per cent stake.
The IPO will not provide the first pay day for Nine's owners.
The day the restructure was approved by the courts early this year $700 million worth of debt was raised, with $570 million paid straight out to investors.
Frequently Asked Questions about this Article…
Nine Entertainment's prospectus indicates that its first-half earnings are expected to grow at a faster rate than the second half. However, the full-year television profit is projected to be about $80 million less than its rival, Seven.
Nine Entertainment's prospectus indicates that its first-half earnings will grow at a faster rate than the second half, although full-year television profit is projected to be about $80 million less than its rival, Seven.
Currently, Nine Entertainment's share of advertising revenue is about 2.5 percentage points less than that of its rival, Seven.
Nine Entertainment's current share of advertising revenue is about 2.5 percentage points less than Seven's, according to the article.
Nine Entertainment's margins, which have been around 18%, are forecasted to exceed 20% according to the prospectus. However, the company still maintains a higher cost base.
Nine Entertainment's margins, which have been around 18%, are forecasted to exceed 20% according to the prospectus, despite having a higher cost base.
Nine Entertainment is expected to sell about $700 million worth of shares in its initial public offering, making it Australia's largest float since 2010.
Nine Entertainment is expected to sell about $700 million worth of shares in its IPO, making it Australia's largest float since 2010.
Nine Entertainment plans to sell approximately $275 million in newly issued shares to reduce its debt to about $600 million.
Nine Entertainment plans to sell about $275 million in newly issued shares to reduce its debt to approximately $600 million.
Current investors have been given an indicative price range of $2.05 to $2.30 for their shares, which will be reflected in the IPO pricing.
Current investors were given an indicative price range of $2.05 to $2.30 for their shares, which will be reflected in the IPO pricing.
When Nine Entertainment lists next month, it is expected to have a market value of about $2 billion, or an enterprise value of $2.6 billion including debt.
Upon listing, Nine Entertainment is expected to have a market value of about $2 billion, or an enterprise value of $2.6 billion including debt.
Oaktree Capital Group, one of Nine's largest investors, plans to sell almost half of its 26% stake, while Apollo Global Management intends to initially retain its 28% stake.
Nine Entertainment expects its EBITDA to rise to about $300 million this year, with $235 million to $240 million generated by its television business, boosted by acquisitions of Nine Adelaide and Perth.
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