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Australia’s Nine IPO prices at bottom of range – Reuters

Reuters – Australia’s Nine Entertainment Co Pty Ltd priced its initial public offering at the bottom of its marketing range, giving the indebted TV network a market capitalisation of A$1.9 billion ($1.74 billion).

One of Australia’s best known media firms, Nine had offered 131 million new shares in an indicative price range of A$2.05 to A$2.35 a share. Nine is raising funds to help pay down debt.

The listing, set for Friday, comes a year after Nine avoided receivership with U.S. private equity funds Oaktree Capital Group and Apollo Global Management taking control in a more than $3 billion debt-for-equity swap.

Nine’s entry into the market is a litmus test for a busy Australian IPO market which remains wary of share offerings by private equity-backed businesses.

“Nine is a solid business, well-run business that has medium-term challenges like all old media, but perhaps not as bad as some others,” said Matt Williams, head of equities at Perpetual, which has been allocated shares in the IPO.

The IPO prices Nine at a multiple of 8.3 times earnings before interest, tax, depreciation and amortisation.

Nine Chief Executive David Gyngell said in a statement the company was “delighted by the strength of demand received for our IPO across both high quality domestic and international investors, with the offering multiple times covered at the final price.”

Many in the market are still scarred by the 2009 listing of department store company Myer Holdings Ltd by private equity firms TPG Capital and Blum Capital. Myer is yet to trade above its A$4.10 issue price.

Oaktree’s holding in Nine will drop to 14 percent from 28 percent and Apollo’s to 22 percent from 26 percent after the listing.