APN buyout in Australia shot down

The proposed $2.5 billion buyout of Australia’s APN News & Media by a consortium led by Irish billionaire Tony O’Reilly’s Independent News & Media has failed to garner enough support. The Carlyle Group and Providence Equity Partners will have to wait for their first Australian deal.

Providence Equity Partners and The Carlyle Group, together with Independent News & Media, the biggest stakeholder of APN News & Media, have failed to impress enough shareholders to part with their stakes to advance their $2.5 billion buyout offer.

The failure follows hot on the heels of the aborted Qantas takeover.

Independent News & Media, owned by Irish billionaire Tony O’Reilly and a 38.5 percent stakeholder in the APN, could not vote on a scheme of arrangement which resulted in 51 percent of the shares voting in favour of the buyout. The proposed buyout, which offered shareholders A$6.20 for each share they held, required the approval of 75 percent of the eligible shares.

Gavin O’Reilly, chief operating officer of Independent Media has told Reuters : “Of course we are disappointed. We are going to look at all our options, we are in no hurry to do anything at this point.”

Perpetual Investments, whose 11.7 percent stake in APN accounted for almost 20 percent of the eligible shares, has been singled out as the shareholder most critical of the deal. Alone, Perpetual would have been able to swing the votes to 78 percent to effect the take-private of APN, according to a source close to APN.

The bid was “a very full price by international standards, although I appreciate that the Australian capital markets do seem to be at dizzy heights,” O’Reilly junior told reporters.

Simon Moore, Carlyle’s managing director in Australia, would not say if the firm will return but he told Bloomberg: “the body’s still warm.”

The failed buyout valued APN at A$3 billion ($2.5 billion) and would have been a first deal for both Carlyle and Providence, a media specialist, in Australia. The proposed transaction would result in Independent Media trimming its stake to a smaller 35 percent shareholding, while giving Providence 37.5 percent and Carlyle 27.5 percent.