Apollo agrees partial exit from Australia's Nine

The sale price was not disclosed but a regulatory filing indicates that a WIN subsidiary acquired approximately 119 million shares in Nine across several transactions on October 19, paying an aggregate A$193 million ($139 million). Nine shares closed at A$1.61 on that day, valuing a 13% stake at around A$189 million.

The stock was down 4.4% at A$1.51 as of mid-afternoon trading on October 22, subsequent to details of WIN's purchase emerging.

The broadcaster owns the WIN Television network - which it claims to be the world's largest privately owned regional television network, as well as other media assets including radio stations. WIN will hold 14.95% of Nine and the company has a similar-sized stake in Ten Network Holdings.

The move comes as the government reviews ownership rules that could result in a spate of mergers in the sector. Free-to-air broadcasters claim that regulations designed to prevent individual players dominating regional markets are increasingly irrelevant in the internet age as viewers turn to online services. New Prime Minister Malcolm Turnbull lobbied for change as communications minister.

Apollo's stake in Nine stood at 22.85% as of September 2015. It will fall to 9.85%, falling below the 15% threshold above which an investor is considered to have control over a media company.

Apollo and Oaktree Capital Group took control of Nine in a debt-for-equity swap worth nearly $3 billion in early 2013. The agreement wiped out A$1.8 million of equity held by former backers CVC Capital Partners - which took ownership of Nine through several highly leveraged transactions between 2006 and 2008 - in the largest-ever loss on a single private-equity deal in Asia.

Nine went public in December 2013, raising A$631 million. Oaktree held a 27.8% stake pre-IPO and sold 89.1 million shares for A$182.6 million in the offering, leaving it with 14.3%. Apollo sold no shares in the IPO and was diluted to 22% from 25.6%. Oaktree held a 7.7% interest in Nine as of September 2015 to Apollo's 22.85%.

The company has been engaged in a share buyback program over the course of 2015 in order to increase returns to shareholders and bolster its balance sheet. The proceeds from the sale of Ticketek, Nine's live events and ticketing business, to Affinity Equity Partners were put towards this effort.

Nine reported revenue of A$1.61 billion for the 2015 financial year, up 2.6% year-on-year. EBITDA fell 7.6% to A$287.3 million, while the company swung from a net profit of A$63.7 million in 2014 to a loss of A$592.2 million in 2015. This was largely due to a non-cash reduction in the carrying value of certain assets.

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• Topics
• Exits
• Media
• Australasia
• Apollo Global Management
• Media
• Australia
• Exit
• Sell down
• Oaktree Capital