ASIC chairman, Jeff Lucy.
Private equity is driving a wave of multi-billion dollar takeovers in corporate Australia and both print and media assets have come under scrutiny as targets for potential debt-funded buyouts. According to ASIC chairman, Jeff Lucy, Australian companies were attractive to private equity companies because of the country’s political stability, because ample regulations are in place, and because many local companies are doing well.
According to Thomson Financial, private equity deals catapulted 21 per cent to $2.3bn in the year to June 30 2006.
As in earlier times when leveraged buyouts were popular, US firm, Kohlberg Kravis Roberts & Co (KKR) is one of the biggest deal-makers, thought it lost out to CVC Asia Pacific to whom the Packer family’s PBL sold half of its media assets for $4.5bn.
A consortium of investors led by KKR also lost out when Coles Myer rejected its $18.3bn bid for the major retailer.
But KKR did succeed with its $1.83bn buyout of Brambles’ waste-management business earlier this year.
The PBL deal was done within hours of Canberra’s removal of limits cross-ownership and foreign ownership of assets in the Australian media segment, and has been followed by intense activity and speculation over the corporate future of some of the nation’s best-known media and mastheads.
After weeks of speculation, Australia’s biggest printer, PMP Ltd, has admitted the it is in preliminary talks with potential private equity investors.
Meanwhile, US private equity fund, Providence Equity Partners, is working with Dublin-based Independent News & Media (INM) in a $3.8bn offer for Australia’s third-largest media group, APN News & Media.
INM is 26 per cent owned by Tony O’Reilly, chairman of the H.J. Heinz baked beans empire and a former rugby international. It has substantial media assets in Ireland, South Africa, Australia and New Zealand where, among other assets, it owns the respected New Zealand Herald masthead.
The changes in Australia’s media laws in October have unleashed a frenzy of buyout activity in the local print and media sector which still has a long run ahead.
