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Shares in APN News & Media plunged to a record low in New Zealand trading after the media group's chief executive, chairman and three independent directors walked over strong-arm tactics by its two biggest shareholders to stop a capital raising.
The shares dropped 14 percent to a record-low 31 cents, with just 12,000 shares changing hands before trading opens in Australia.
On the ASX shares were down 8.3% to A27.5 cents.
Chief executive Brett Chenoweth, chairman Peter Hunt and independent directors Melinda Conrad, John Harvey and John Maasland have left APN, and independent director Kevin Luscombe will retire in April as planned.
Independent News & Media and fund manager Allan Gray, who collectively own half the company, opposed a capital raising aimed at repaying some $A480 million of debt that could have diluted their share if they did not participate.
The exit leaves INM's appointees Paul Connolly, Vincent Crowley, former INM director Peter Cosgrove and deputy chairman Ted Harris.
The dispute came down to Mr Chenoweth's plans to a pro-rata capital raising that would have been underwritten by adviser Macquarie Capital.
"While the board of directors agreed the company needed to reduce its debt, it was unable to agree on the methodology," the company said in a statement yesterday.
"The departing directors have a different view on gearing levels to the major shareholders and in light of their opposing position it is not tenable for them to continue."
Before the boardroom kerfuffle, the stock is rated an average 'underperform' based on 11 analyst recommendations compiled by Reuters with a median target price at 31.5 Australian cents. That gives it a market capitalisation of $A199.5 million, compared to the $A900.6 million enterprise valuation.
APN will announce its annual results on Thursday and analysts are picking the media group to post a bottom line loss of $A287.5 million, according to forecasts collated by Reuters.
Those picks include a 14 percent fall in sales to $A915.9 million and a 29 percent slump in earnings before interest, tax, depreciation amortisation and depreciation of $A150.1 million.
INM's victory was well-received by its investors, with the stock gaining 5.6 percent to 0.0338 euro. The Irish company's balance sheet has been under pressure with high levels of debt for several years and it got some breathing room this weekend after finding a buyer for its South African operation.
That would leave APN as the Irish group's only operation outside Ireland, which the Australian newspaper is reporting as leaving it ripe for a break-up.
Allan Gray managing director Simon Marais told the Australian Financial Review last week he opposed the rights issue and has previously said he favours a tie-up with Fairfax Media Group, of which he is also a substantial shareholder.
The New Zealand Herald newspaper has unsuccessfully been shopped around, with billionaire Owen Glenn last month saying the numbers did not stack up, while APN's South Island regional papers were put on the block last year.
APN's Brisbane printing facilities have been touted as a potential tie-up with News Ltd, while Clear Channel Communications, its joint owner of ARN, has been seen as a natural buyer for the radio assets.
The Australian media group is grappling with falling advertising revenue and plans to sell non-core media assets in New Zealand after a strategic review of operations in this country. It took an $A485 million charge against its New Zealand publishing assets unit as part of the ongoing review.
The Irish media group went through its own boardroom battle in recent years after Denis O'Brien successfully ousted the O'Reilly family after a ceasefire between the billionaires in 2009.