Mediaboss Marketing

Rupert Murdoch's News Corp has acquired a 14.9 per cent stake in APN. Photo: Lucy Nicholson

Rupert Murdoch's News Corporation has intrigued its rivals by swooping on a 14.99 per cent stake in APN News & Media, which owns strong-performing radio assets, positioning Australia's biggest media company for further consolidation of the struggling media sector.

It acquired most of the stake in a sale by APN's Irish dominant shareholders, ending a 27-year-relationship with the trans-Tasman newspaper, radio and outdoor advertising group by selling their combined 30 per cent stake for about $300 million.

The surprise move, news of which was broken on Thursday morning by Fairfax Media, comes as the federal government considers ripping up cross-media ownership restrictions that limit mergers between traditional players.

While News describes the holding as an "investment stake", APN pays no dividends and the shares have already performed strongly in the past 18 months."It's not untypical for News to buy these strategic stakes as part of a bigger-picture move or a bigger play," said one senior media executive who asked not to be named.

Advertisement

A 14.99 per cent stake gives News, which is prevented by law from buying APN, a right of veto if another company attempted to acquire APN via a scheme of arrangement. News Corp's local rival Fairfax Media, which owns The Australian Financial Review and Business Day, has discussed various commercial opportunities with APN in recent years.

APN owns more than 100 regional newspapers, many of them in Queensland, and Australian Radio Network, which is the star of the radio sector with leading FM breakfast shows on its Sydney stations KiiS FM, and WS FM.

News Corp is prevented from acquiring 15 per cent or more of APN because News co-chairman Lachlan Murdoch owns 100 per cent of rival radio company Nova Entertainment. Nova owns the Sydney stations Nova and Smooth FM. No media owner can control more than two radio licences in a major market.

News Corp's move took some media watchers aback because APN shares have already performed very strongly as it has fought back from a debt crisis. The stock, which was suspended at 94 on Thursday morning, has almost doubled in the past year having traded as low as 22 in June 2013.

Originally posted here:
Rupert Murdoch's News Corp takes 14.9pc stake in APN as Independent News & Media exits