PE-Backed Nine Entertainment Exits Carsales.com

Nine Entertainment, which is owned by buyout shop CVC Asia Pacific, has sold its stake in carsales.com for $565 million, Reuters reported. The sale was aimed at cutting debt and taking advantage of a recent rally in the shares of the Australian online car classifieds business, Reuters wrote. CVC has been considering an initial public offering for Nine Entertainment, and recently hired Credit Suisse, Goldman Sachs and UBS to advise on an IPO.

(Reuters) – Private equity-owned Nine Entertainment has sold its stake in carsales.com for $565 million to cut debt, taking advantage of a recent rally in the shares of Australia’s top online car classifieds business.

The move by Nine Entertainment’s private equity owner CVC Asia Pacific will not affect any decision on the timing of a float of Nine, which would be worth around $4.5 billion, a person close to CVC said.

“It was an opportunity and a strong price, but it has no impact at all on the timing of a possible float,” said the person, who declined to be named because the IPO plan has not been made public.

Nine Entertainment sold its 49.1 percent stake in carsales through UBS to institutional investors at A$4.92 a share, a 6 percent discount to carsales.com’s Friday close .

In the ten days leading up to the sale, carsales shares had climbed 9 percent to a 10-month high after the company reported a 45 percent jump in first-half profit.

CVC has been considering floating Nine Entertainment, which owns TV broadcaster Nine Network and Australia’s largest magazine group ACP, following a pick-up in advertising and a revival in the fortunes of free-to-air TV broadcasters with new digital channels.

Those factors have spurred a string of deals, including West Australian Newspapers’ agreement to buy Nine’s rival Seven Media Group for $2 billion from Seven Group Holdings and private equity firm Kohlberg Kravis Roberts .

CVC appointed Credit Suisse, Goldman Sachs and UBS to advise on an IPO, but is under no pressure to sell as its debt of between A$3 billion and A$4 billion is not due to be refinanced until 2013.

Carsales.com Chief Executive Greg Roebuck said the sale would have little impact on the company as operational ties with ACP Magazines and Nine Entertainment had been minimal.

“We expect it to be business as usual,” Roebuck said in a statement.

Carsales shares fell 4.4 percent to one-week low of A$5.01. The broader market was down 1.4 percent. ($1 = 0.986 Australian Dollars) (Reporting by Sonali Paul; Editing by Balazs Koranyi and Vinu Pilakkott)