50% of the NineMSN portal has been sold to private equity group CVC Asia Pacific also sold is 50% of carsales.com.au along with a stake in SkyNews.
50% of the NineMSN portal has been sold to private equity group CVC Asia Pacific also sold is 50% of carsales.com.au along with a stake in SkyNews.
The move comes as James Packer’s Publishing and Broadcasting Ltd has sold half its media interests to private equity group CVC Asia Pacific and created Australia’s largest diversified media group, PBL Media Ltd.
PBL will receive net cash proceeds of $4.542 billion under the deal. It will spin off the Nine Network, ACP Magazines, its half-share in online portal ninemsn and its stake in carsales.com.au to the new company. PBL executive chairman James Packer said the restructure will allow PBL to expand its gaming interests.
PBL chief executive John Alexander will become PBL Media executive chairman and ACP CEO Ian Law will become PBL Media chief executive. The deal would enable PBL Media to take advantage of Australian and overseas media opportunities, PBL said.
PBL said it had entered into binding agreements to implement a recapitalisation of certain of its media interests, including ACP Magazines, Nine Network (including its interest in Sky News), its 50 per cent interest in ninemsn and its 41 per cent shareholding in carsales.com.au.
Those media businesses are being transferred to a new company, PBL Media, in which PBL and CVC Asia Pacific will each hold a 50 per cent economic interest.
PBL said the recapitalisation was worth $5.5 billion.
To fund the payment to PBL, PBL Media has underwritten financing from UBS for new debt of $3.75 billion non-recourse to PBL and CVC.
Additionally, CVC will invest $982 million to acquire convertible notes in PBL Media.
PBL said once the new media laws become effective CVC’s convertible notes will convert to 50 per cent of the ordinary shares in PBL Media.
“Until that time, PBL will continue to control the Nine Network,” PBL said.
Mr Packer said PBL had over the last 12 months strongly indicated its desire to invest in new opportunities.
“The restructure will provide the capital and flexibility necessary for the company to achieve its ambition to expand its international gaming interests,” Mr Packer said in the statement.
“A clear benefit of the restructure will be the quarantining of the gaming and media businesses, with the latter’s use of non-recourse debt protecting PBL shareholders from additional capital risk incurred in the funding of any expansion through acquisition.
“For PBL it releases cash at a time when there is a land-grab underway for gaming and entertainment assets around the world.”
Mr Alexander said the transaction “enables PBL Media to take advantage of opportunities in the media sector both in Australia and overseas”.
AAP
