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Shares in APN News & Media [NZX: APN] surged to an 18-month high when they resumed trading after institutions put up A$112 million in a planned capital raising for the media group to buy out its partner to take control of its radio businesses.
The dual-listed stock rose 14 percent to 56 cents on the NZX, its highest level since Aug. 16, 2012, and was up 22 percent to 53.7 Australian cents on the ASX.
The Sydney-based company raised A$112 million from institutions with about 98 percent of those eligible investors taking up their 5 for 9 entitlement at 36 Australian cents a share. A further A$20 million will be raised from existing retail investors when the offer opens on Feb. 27. Both parts of the capital raising were underwritten by CBA Equities.
"We are delighted with the support that we have received from our shareholders," chief executive Michael Miller said in a statement. "In addition to the high take-up rate, we are also very encouraged by the significant interest from new institutional investors."
APN has been restructuring its business over the past year, quitting assets including its stake in an outdoor advertising venture, its unprofitable brandsExclusive online shopping site and a suite of New Zealand magazines
The capital raising will go towards buying out APN's US partner Clear Channel's stake in Australian Radio Network and The Radio Network in New Zealand for A$246.5 million. The rest will come from A$60 million reaped from the sale of its outdoor advertising business and A$61 million in existing bank debt.
The issue has the backing of major shareholders Allan Gray Australia, Independent News & Media and Irish billionaire Denis O'Brien's Baycliffe.
That's a turnaround for Independent News and Allan Gray, who last year forced a board-room shake-out of the Australian media group after baulking at APN's plans to raise capital to shore up its own debt-plagued books.
Independent News, which raised 43 million euros of fresh capital last year to protect its APN stake, won't participate and will be diluted to 18.6 percent from 29 percent. Its entitlement will be taken up by Baycliffe, lifting its stake to 12.2 percent from 1.9 percent and keeping O'Brien's total interest in APN through the two companies at 30.8 percent.
"Having recently concluded a substantial restructuring and strengthening of its balance sheet, including a significant equity issue, INM's priority objective at this time is to retain the operational flexibility necessary to reposition its operations for an improvement in Ireland's evolving media market," the Irish company said in a statement earlier this week.
"INM is fully supportive of APN's strategy - the acquisition of the remaining 50 percent of its radio assets and the related capital raise - and remains fully committed to retaining its strategic stake in an enlarged APN," it said.