Sparring partners boost APN

AFTER a horrible year of disasters and disastrous advertising revenue, it seems someone finally likes the look of the troubled APN News & Media, and it's a man with very sizeable pockets.

By InvestSMART · 1 Sep 2011

By InvestSMART ·
1 Sep 2011

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AFTER a horrible year of disasters and disastrous advertising revenue, it seems someone finally likes the look of the troubled APN News & Media, and it's a man with very sizeable pockets.

The Irish telecoms and media billionaire Denis O'Brien, the country's fourth-richest person, has bought 8 million shares in the trans-Tasman publisher and broadcaster, in the same month as it recorded a $98 million loss.

APN's share price has fallen from over $1.70 in February to 74? last month, suffering poor retail and consumer conditions, like other media stocks, and was particularly hard-hit by the floods in Queensland and earthquakes in Christchurch (its flagship publication is The New Zealand Herald).

But it gained 4 per cent yesterday to close at 86.5?, helped by a rising market and the announcement of Mr O'Brien's stake.

His new 1.4 per cent direct holding cost him $6.6 million and comes on top of his indirect stake through the listed Irish company, Independent News & Media, of which he owns 22 per cent. In turn, it owns 31 per cent of APN.

He is now Independent's largest shareholder, above rival Irish billionaire Sir Anthony O'Reilly, who bought the company in 1973 and ran it until 2009, and whose son, Gavin, is chief executive of Independent and chairman of APN.

The O'Brien and O'Reilly teams have had repeated stand-offs over control of the company, corporate governance and coverage of O'Brien in the company's newspapers.

The antipathy apparently stems from the time Mr O'Brien won Ireland's second mobile phone licence in 1995. Mr O'Reilly was another bidder, and claims his rival was helped by a government minister were the subject of a long-running inquiry.

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Frequently Asked Questions about this Article…

What recent financial results did APN News & Media report?

APN recorded a heavy loss of about $98 million in the month covered by the article, reflecting a very weak year for advertising revenue and other pressures on the business.

Who is Denis O'Brien and how much of APN did he buy?

Denis O'Brien is an Irish telecoms and media billionaire. He bought 8 million APN shares, representing a new direct holding of about 1.4% that cost him roughly $46.6 million, on top of an indirect stake via his holding in Independent News & Media.

How did APN's share price move recently and what drove the change?

APN's share price fell from above $1.70 in February to about $0.74 last month, then rose roughly 4% to close around $0.865 after a broader market lift and the announcement of Denis O'Brien's stake.

What ownership links exist between Denis O'Brien, Independent News & Media and APN?

O'Brien owns about 22% of listed Independent News & Media; Independent in turn owns roughly 31% of APN. That means O'Brien now has both a direct stake in APN and a material indirect holding through Independent.

Why did APN fare worse than some other media stocks?

The article points to poor retail and consumer conditions, sharply lower advertising revenue and specific local events — notably floods in Queensland and earthquakes in Christchurch — that hit APN's flagship publication, The New Zealand Herald.

Could shareholder tensions affect APN's outlook?

Yes. The piece notes repeated stand-offs between O'Brien's team and the O'Reilly/Independent group over control, corporate governance and newspaper coverage. Those kinds of disputes can influence strategy, leadership and investor sentiment.

Who are the other key people involved in APN's ownership and management?

Independent News & Media is a major owner of APN. Sir Anthony O'Reilly and his family have been long‑standing figures in the group, and Gavin O'Reilly is chief executive of Independent and chairman of APN, placing him centrally in ownership and governance dynamics.

What should everyday investors watch next for APN News & Media?

Watch forthcoming earnings and advertising revenue updates, any further share purchases or announcements from Denis O'Brien or Independent News & Media, and developments in the reported governance disputes — all of which could affect APN's share price and recovery prospects.