Irish media magnate Tony O'Reilly's IndependentNews and Media teamed up with two buyout firms to launch a renewed takeover for APN News and Media, valuing the Australasian group at A$2.8 billion (US$2.2 billion).
Independent, which has a 40% stake in APN, joined private equity heavyweights Carlyle Group and Providence Equity Partners to offer A$6.05 a share for APN, just above a previous offer, but below the stock's recent highs.
Shares in APN, which owns New Zealand's largest paper and a string of radio stations, opened at A$6.20 on Thursday, suggesting some shareholders expect a higher offer.
Analysts said the bid had a mixed chance of success as it was pitched just below APN's current share price, but played down the likelihood of a rival bid. "It is unlikely there will be a counterbid from another party given APN has control of it already. It does not seem as much a premium as some of the other (media) deals," Shaw Stockbroking analyst Greg Fraser said.
Including APN's debt and convertible notes, the offer is worth about A$3.8 billion, a source familiar with the deal and analysts said.
Previous talks between the two companies ended in November, after Independent News made a joint approach with Providence amid a shake-out of Australia's television, radio and newspaper market ahead of the introduction of new media ownership laws this year.
The details of APN's previous approach were never released but sources have said the earlier bid was valued at A$6.02 per share.
Dublin-based Independent, which publishes 175 newspaper and magazine titles across the globe including Britain's Independent, indicated last year the door was open for another offer.
Independent chairman O'Reilly, a former international rugby player, is Ireland's best-known businessman and a high-profile global investor.
The former HJ Heinz chairman has worked with Providence before, partnering the private equity firm and international financier George Soros in the 3 billion euro buyout of Irish phone company Eircom in 2001.
Ted Harris, chairman of the independent committee of the APN Board, said in a statement: "The proposal will now be considered by the committee, which will decide whether it is in the best interests of all shareholders, and make a recommendation as quickly as possible." A source familiar with the situation said a recommendation was likely next week.
Independent was expected to have a 35-40% stake APN if the deal goes ahead, with Caryle and Providence holding about 30% each, another source said.
The buyout firms are the latest private equity groups to grab a piece of the Australian media industry following the passage of a law which allows owners of one form of media to own a second type in the same market and scrapping foreign ownership limits.
Kohlberg Kravis Roberts set up a A$4 billion joint venture with Seven Network's media businesses last year, while and Publishing & Broadcasting tipped its media assets into a joint venture with CVC Asia Pacific.
APN is the largest radio broadcaster in Australasia and publishes a range of newspapers and magazines, including New Zealand's biggest daily newspaper, the New Zealand Herald. The offer includes a final APN dividend and is subject to due diligence. A bid of A$6.05 a share prices it at 17.2 times forecast earnings for this year, compared with the earnings multiple of 20.7 that News Corp. and Seven paid to grab stakes in Australia's John Fairfax Holdings and West Australian Newspapers Holdings last year.
Australia's Ten Network is also on the block with interested parties invited to submit indicative bids by mid-February, sources told Reuters last week.
APN's biggest institutional shareholder, fund manager Perpetual Investments with 14.8% stake, was not immediately available to comment.