News Corp will pay $36.6m to buy APN regionals
News Corp has signed a deal to buy APN News & Media's Australian regional newspaper business, leaving APN to focus on its radio stations and outdoor advertising business.
Any transaction will remain subject to approval from the Australian Competition and Consumer Commission before it is finalised.
APN Australian Regional Media, publisher of this website, has a portfolio of 12 daily and more than 60 non-daily Australian regional newspapers.
Titles include the Sunshine Coast Daily, Toowoomba Chronicle, the Daily Mercury in Mackay, Queensland Times in Ipswich and northern NSW titles including the Northern Star and Daily Examiner.
News Corp, already holds a stake of almost 15 per cent in APN, which means shareholder approval would also be required for what would be deemed a related-party transaction.
APN CEO Ciaran Davis confirmed the news to staff in an email just before 11am on Tuesday.
"This is an historic day as we are letting go of our custodianship of a great business - one that is ingrained in the local communities in which it operates,'' Mr Davis said.
"It was not an easy decision but I strongly believe our decision is in the best interests of both APN and ARM.
"As you know News Corp has tremendously deep experience in publishing, regional media and investing for growth and is a strong believer in the power of local content. They have a strong commitment and passion for regional publishing in Australia.
"I appreciate your efforts in what has been a difficult time over the past 12 months in particular as the business has continued to face market headwinds.
"Yet I also express confidence that ARM has a clear path forward and News Corp is the right partner to take the business forward. "
In a statement to the stock exchange, APN News & Media Limited [ASX, NZX: APN] announced it had entered into binding documentation to divest its Australian Regional Media division ("ARM") to News Corp Ltd for $36.6 million.
Net proceeds from the sale will predominantly be used to pay down existing APN debt.
The Chairman of APN Peter Cosgrove, described the divestment as another significant milestone in APN pivoting its future towards radio and outdoor media assets which hold great potential for the future.
"The divestment of ARM is an historic day for the company as APN has been the custodian of some wonderful newspapers whose community roots go back over 150 years,'' Mr Cosgrove said.
"We are now passing that ownership onto another media group with deep publishing experience across regional Australia.
"The future of APN looks bright. On the back of the NZME demerger that was overwhelmingly supported by our shareholders last week, we will be a more nimble media company purely focused on growing our media assets of radio and outdoor," Mr Cosgrove said.
Mr Davis, said the APN management team was executing on a clear strategy to own and invest in its highly successful radio business and growing outdoor division.
"Radio and Outdoor are terrific mediums for advertisers. The sectors are growing, they are complementary, and they have both led innovation in the media industry across the digital sector," Mr Davis said.
In recent months, Australian Regional Media has also put a solid focus on building its digital subscription business, signing up thousands of new subscribers.
The Australian reported on Monday that APN wanted A$50 million for its regional newspapers and that NewsCorp and Singapore-based social media marketing firm Fetch Plus had lodged binding offers when final bids were due on Friday.
In New Zealand, APN received Overseas Investment Office approval on Monday for its plan to split out its NZME unit, which owns its New Zealand media assets, ahead of a potential merger with rival Fairfax Media's New Zealand operations.
Its shareholders last week overwhelmingly backed the plans to carve out the New Zealand unit as a standalone listed company, freeing up APN to focus on Australian radio and outside advertising business.
Analysts said exiting the New Zealand assets would allow APN to better participate in the consolidation of the Australian media sector, where media ownership laws are expected to be relaxed next year.