Former INM director Cosgrove gets APN chair
Former Independent News & Media director Peter Cosgrove has been given the chair of APN News & Media after the Irish company successfully rolled the board in the face of a capital raising that could have watered down its stake in the Australian company.
Mr Cosgrove, who joined APN's board in 2003 and spent two decades as an INM director, was today named chairman effective immediately, APN says in a statement.
He replaces Peter Hunt, who quit the board along with independent directors Melinda Conrad, John Harvey and John Maasland and chief executive Brett Chenoweth yesterday. Independent director Kevin Luscombe is also scheduled to retire in April.
The boardroom rollover comes after INM 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, Cosgrove and deputy chairman Ted Harris.
APN's shares fell 6.7 percent to 28 Australian cents on the ASX, and closed 2.8 percent lower on the NZX at 35 cents, having previously dropped to a record low on the New Zealand bourse.
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 will 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.
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.