APN News has demerged its New Zealand business, New Zealand Media and Entertainment (NZME), with 99.98% of shareholders voting in favour of the move.
The deal frees up APN to focus on Australian radio and outdoor advertising business, while NZME can pursue its merger with Fairfax New Zealand.
APN News and Media CEO Michael Miller said in his address to shareholders the focus on radio and outdoor will be through ARN and Adshel assets.
APN News and Media chairman Peter Cosgrove said: “The demerger creates two independent and focused media companies. We believe it will enhance shareholder value by enabling them to better pursue their own strategic priorities and growth initiatives.”
Speculation of the merger started after APN lodged a full trading halt with the ASX in May. Fairfax and APN soon confirmed the NZ merger plans, after APN announced it was raising $180m in capital funds to demerge its assets, which includes newspaper The New Zealand Herald.
With the demerger of NZME going ahead, Cosgrove says Sir John Anderson will resign from the APN board to become NSME’s chairman and Peter Cullinane will join the NZME board while retaining his place on the APN board.
Cosgrove said in his statement APN continues to “believe in the synergies between NZME and Fairfax’s New Zealand business” with the assets bases being complementary.
"The demerger gives both APN and NZME flexibility to pay dividends within the next 12 months," Cosgrove said.
On Tuesday, The Commerce Commission released a state of preliminary issues regarding the tie-up between Fairfax New Zealand and APN’s NZME. New Zealand’s competition watchdog has said they will investigate if the proposed merger is likely to “substantially lessen competition” in relevant markets.
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