The company that owns the Nine Network will make a $2 billion debut on the local share market in December – less than a year after it almost went into receivership.
Shares in Nine Entertainment Co, which owns the Nine Network, Ticketek and ninemsn, are expected to be issued at between $2.05 and $2.35 each.
If the higher price is achieved, chief executive David Gyngell would hold a $10.7 million stake in Nine, and will also be paid a cash listing bonus of $2.5 million.
That would come on top of his $2 million base salary, plus up to $2 million in annual bonuses.
Nine is expected to be worth between $1.93 billion to $2.17 billion when it lists on the Australian Securities Exchange on December 6, with new investors to make up one third of its shareholder base.
Steve Allen, the founder of media planning business Fusion Strategy, said institutional investors would be wary about paying more than $2 a share, considering that a year ago Nine owed $2.3 billion to US hedge funds Apollo and Oaktree, and another $1 billion to investment bank Goldman Sachs.
“I don’t think the big investors will be rushing towards this,” he told AAP.
“Most of the big investors don’t feel the media sector’s got much to offer.”
Still, Nine has been busy bulking up its business since a Federal Court judge in January approved of a debt-for-equity deal that ensured its immediate future.
It has bought WIN’s TV stations Adelaide and Perth, and just three weeks ago purchased Microsoft’s 50 per cent stake in digital group Mi9, which runs ninemsn.
In late January, a $3.4 billion refinancing deal ended private equity group CVC Asia-Pacific’s stewardship of Nine, and wrote off a $1.9 billion investment loss.
This gave Apollo and Oaktree major shareholdings in exchange for debt.
Mr Allen said smaller, retail investors were more likely to buy Nine shares, with signs the advertising market would recover during the next two to three years.
“Television’s a mature business but its outlook is quite reasonable,” he said.
“Many people have said `television’s terminal, it’s going to be dead’. That hasn’t proven to be the case.”
Mr Gyngell said the listing would help Nine maintain its market position as a leading free-to-air network, and expand its events and digital businesses.
“A listing on the ASX will help us to continue our strong momentum,” he said.