Nine Entertainment has opened a data room for the sale of its Australian Community Media business, with due diligence by three parties said to be under way.
Anchorage Capital, former Domain Group boss Antony Catalano and Allegro Funds Management are in the contest and the suitors will now be trawling through hundreds of documents before the second round of bidding, due in about six weeks’ time.
Some sources say that Allegro was asked by Nine’s adviser, Macquarie Capital, to submit a bid after the 5pm deadline last Wednesday, although the buyout fund did not comment.
ACM comprises 170 publications and related websites including The Canberra Times, The Newcastle Herald, The Border Mail and the Illawarra Mercury. ACM was part of Fairfax Media that was recently acquired by Nine. The sale is part of Nine’s plan to divest non-core assets following the demerger.
Nine said it expected ACM’s earnings before interest, tax, depreciation and amortisation for the year to be $44.6 million, and reported $21m in EBITDA for the half year.
Newspaper assets typically sell for about twice their earnings, although half of the value of ACM is said to be in its real estate assets. Other Fairfax assets earmarked for sale by Nine are its events business and New Zealand publishing operations, while debate continues as to whether Nine will part with the Fairfax stake of 2GB owner Macquarie Media.
One idea being mooted is a sale of Macquarie Media to News Corp, publisher of The Australian, and a divestment of Nova, owned by News Corp co-chairman Lachlan Murdoch, to Nine.
However, DataRoom understands that the idea being thrown around by dealmakers has not progressed and is not currently on the agenda.
Analysts say the logic of that idea is that the content of Macquarie Media’s stations such as 2GB and Melbourne’s 3AW aligns more with the content of some of News Corp’s assets, while music radio business Nova, which counts celebrities such as Fitzy and Wippa among its talent pool, would be a good fit for Nine.
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