Nine roadshow draws mixed response

The media company will start the Australian leg of the roadshow in Melbourne today, with Sydney to follow later in the week after concluding a lengthy international tour last week.

It's believed Nine will commence trading in the $2.10 to $2.15 price per share range, giving Nine a price to earnings ratio of about 8.4 times.

The television, digital and events company outlined an indicative price range of $2.05 to $2.35 per share in the prospectus issued to potential investors, with a price to earnings ratio of 8.3 times to 9.1 times.

Meanwhile, there have been claims in the market that Nine has talked up a double-digit spike in advertising revenue for December and claimed it has sold out. This has been denied by sources close to Nine.

Nevertheless, demand from advertisers in December is said to be strong, after Nine's share of media agency bookings surprised rival network bosses in October.

Nine's share surged 9.8 per cent year-on-year, giving the network a 37.2 per cent share of the metropolitan television market, according to Standard Media Index booking data.

The total metro TV ad market grew by 4.5 per cent.

Last year's October was something of a recalibration for Nine as advertisers that pumped money into the network to support its telecast of the London 2012 Olympics readjusted spend to other networks post-Olympics.

The bookbuild, which takes place over two days starting on December 3, will determine the final price set to be announced to the market on December 5.

Early indications suggest a mixed reaction from institutional investors has lowered the price range.

Some institutional investors have passed up the opportunity to buy shares in Nine, citing "poor cash flow" and the valuation.

Institutional investors focus on cash flow as the best way to understand earnings, and some investors believe Nine's cash conversion compares unfavourably with its closest peer, Seven West Media.

Nine management has told investors that the company's earnings will improve in the next few years following its acquisition of TV stations in Perth and Adelaide.

The retail component has raised about $100 million, or just under 15 per cent, of the $570m earmarked from the equity raising.

Demand from retail investors was weaker than expected, with banks working on the float hoping to raise about 20 to 25 per cent from mum-and-dad investors.

Led by Nine chief executive David Gyngell and chief operating officer Simon Kelly, the roadshow has visited major financial centres in Asia, Europe and North America in the past three weeks.

On the positive side, investors are said to be impressed by Australia's anti-siphoning regime, which ring-fences premium sports for broadcast on free-to-air networks, unlike similar media economies in other parts of the world. "Asia's very strong at the moment," a banker working on the float said. "We got very good feedback. There was engagement in the UK. They have just finished the US, so feedback is still coming in from from that."

Goldman Sachs analyst Christian Guerra last week raised the broker's forecasts for free-to-air television's advertising market share, concluding it was well positioned for "cyclical leverage" as media companies await a recovery in the advertising market.

- See more at: http://www.theaustralian.com.au/media/broadcast/nine-roadshow-draws-a-mixed-response-to-stockmarket-listing/story-fna045gd-1226767343694#sthash.8QNLl6uy.dpuf

The media company will start the Australian leg of the roadshow in Melbourne today, with Sydney to follow later in the week after concluding a lengthy international tour last week.

It's believed Nine will commence trading in the $2.10 to $2.15 price per share range, giving Nine a price to earnings ratio of about 8.4 times.

The television, digital and events company outlined an indicative price range of $2.05 to $2.35 per share in the prospectus issued to potential investors, with a price to earnings ratio of 8.3 times to 9.1 times.

Meanwhile, there have been claims in the market that Nine has talked up a double-digit spike in advertising revenue for December and claimed it has sold out. This has been denied by sources close to Nine.

Nevertheless, demand from advertisers in December is said to be strong, after Nine's share of media agency bookings surprised rival network bosses in October.

Nine's share surged 9.8 per cent year-on-year, giving the network a 37.2 per cent share of the metropolitan television market, according to Standard Media Index booking data.

The total metro TV ad market grew by 4.5 per cent.

Last year's October was something of a recalibration for Nine as advertisers that pumped money into the network to support its telecast of the London 2012 Olympics readjusted spend to other networks post-Olympics.

The bookbuild, which takes place over two days starting on December 3, will determine the final price set to be announced to the market on December 5.

Early indications suggest a mixed reaction from institutional investors has lowered the price range.

Some institutional investors have passed up the opportunity to buy shares in Nine, citing "poor cash flow" and the valuation.

Institutional investors focus on cash flow as the best way to understand earnings, and some investors believe Nine's cash conversion compares unfavourably with its closest peer, Seven West Media.

Nine management has told investors that the company's earnings will improve in the next few years following its acquisition of TV stations in Perth and Adelaide.

The retail component has raised about $100 million, or just under 15 per cent, of the $570m earmarked from the equity raising.

Demand from retail investors was weaker than expected, with banks working on the float hoping to raise about 20 to 25 per cent from mum-and-dad investors.

Led by Nine chief executive David Gyngell and chief operating officer Simon Kelly, the roadshow has visited major financial centres in Asia, Europe and North America in the past three weeks.

On the positive side, investors are said to be impressed by Australia's anti-siphoning regime, which ring-fences premium sports for broadcast on free-to-air networks, unlike similar media economies in other parts of the world. "Asia's very strong at the moment," a banker working on the float said. "We got very good feedback. There was engagement in the UK. They have just finished the US, so feedback is still coming in from from that."

Goldman Sachs analyst Christian Guerra last week raised the broker's forecasts for free-to-air television's advertising market share, concluding it was well positioned for "cyclical leverage" as media companies await a recovery in the advertising market.

- See more at: http://www.theaustralian.com.au/media/broadcast/nine-roadshow-draws-a-mixed-response-to-stockmarket-listing/story-fna045gd-1226767343694#sthash.8QNLl6uy.dpuf

The media company will start the Australian leg of the roadshow in Melbourne today, with Sydney to follow later in the week after concluding a lengthy international tour last week.

It's believed Nine will commence trading in the $2.10 to $2.15 price per share range, giving Nine a price to earnings ratio of about 8.4 times.

The television, digital and events company outlined an indicative price range of $2.05 to $2.35 per share in the prospectus issued to potential investors, with a price to earnings ratio of 8.3 times to 9.1 times.

Meanwhile, there have been claims in the market that Nine has talked up a double-digit spike in advertising revenue for December and claimed it has sold out. This has been denied by sources close to Nine.

Nevertheless, demand from advertisers in December is said to be strong, after Nine's share of media agency bookings surprised rival network bosses in October.

Nine's share surged 9.8 per cent year-on-year, giving the network a 37.2 per cent share of the metropolitan television market, according to Standard Media Index booking data.

The total metro TV ad market grew by 4.5 per cent.

Last year's October was something of a recalibration for Nine as advertisers that pumped money into the network to support its telecast of the London 2012 Olympics readjusted spend to other networks post-Olympics.

The bookbuild, which takes place over two days starting on December 3, will determine the final price set to be announced to the market on December 5.

Early indications suggest a mixed reaction from institutional investors has lowered the price range.

Some institutional investors have passed up the opportunity to buy shares in Nine, citing "poor cash flow" and the valuation.

Institutional investors focus on cash flow as the best way to understand earnings, and some investors believe Nine's cash conversion compares unfavourably with its closest peer, Seven West Media.

Nine management has told investors that the company's earnings will improve in the next few years following its acquisition of TV stations in Perth and Adelaide.

The retail component has raised about $100 million, or just under 15 per cent, of the $570m earmarked from the equity raising.

Demand from retail investors was weaker than expected, with banks working on the float hoping to raise about 20 to 25 per cent from mum-and-dad investors.

Led by Nine chief executive David Gyngell and chief operating officer Simon Kelly, the roadshow has visited major financial centres in Asia, Europe and North America in the past three weeks.

On the positive side, investors are said to be impressed by Australia's anti-siphoning regime, which ring-fences premium sports for broadcast on free-to-air networks, unlike similar media economies in other parts of the world. "Asia's very strong at the moment," a banker working on the float said. "We got very good feedback. There was engagement in the UK. They have just finished the US, so feedback is still coming in from from that."

Goldman Sachs analyst Christian Guerra last week raised the broker's forecasts for free-to-air television's advertising market share, concluding it was well positioned for "cyclical leverage" as media companies await a recovery in the advertising market.