INM revives interest in Australia's APN

Independent News & Media has revived its bid for Australia's APN News & Media, sweetening its offer and securing another backer - the private equity house Carlyle.

INM, the Irish company that publishes The Independent, would take the Australian company private if its offer of A$3.75bn (£1.5bn), including debts, is successful. INM, which already owns 41 per cent of APN, originally announced a bid in late November with the private equity house Providence Equity Partners, worth A$6.02 a share.

It subsequently dropped the deal, reportedly because Providence balked at the demand for a higher price from some large minority APN shareholders.

APN, which owns The New Zealand Herald and a string of media assets in Australia, comes with a debt of A$650m.

Now, according to press reports in Australia, Providence is back on board alongside Carlyle, which opened an office in Australia in 2005. The offer has been increased to A$6.05 a share, which represents a multiple of 12.9 times APN's expected 2006 earnings. While the value of the offer is below APN's closing share price of A$6.15 yesterday, it is better than the multiple offered in other recent Australian media deals.

After a relaxation of media ownership rules in Australia there has been a flurry of deals, mostly involving private equity money. These have included the sale of an interest in the media assets of James Packer's Publishing & Broadcasting, and a deal that saw KKR acquire half of the Seven Network.

Under INM's plans, APN would be leveraged up once it is in private hands, freeing up cash that would go back to INM. In November, APN said: "The balance of the cash to be received by INM as a result of the consortium's offer will be applied towards the acceleration of the group's expansion in its global markets, to the maximisation of shareholder returns and to general corporate purposes."