Kiwi media group seeks TV stake

Majority of interest stems from private equity

AUCKLAND — Local management at CanWest MediaWorks New Zealand may seek a stake in the revamped TV-radio group if it changes hands in the current sale process.

The Kiwi media operation’s been under due diligence from prospective buyers for several weeks following a Citigroup review of CanWest Global Communications’ Australian and New Zealand assets.

Interest in the Canadian’s 56% stake in the Australian Ten Network has been limited with Aussie media questioning if it will go ahead.

Signs seem better for CanWest’s 70% stake in company with two webs, TV3, which is growing, and C4, which is low cost, along with resilient cash flow through the division that owns half of New Zealand’s commercial stations.

Much of the interest so far has been from private equity that has already taken a big stake of Australian media assets Publishing & Broadcasting Limited and Seven Network following relaxation of Australian government media ownership rules.

There are no restrictions on foreign ownership of New Zealand media.

CanWest MediaWorks New Zealand spokesman Roger Beaumont said several interested parties had been looking at the company and the period under due diligence was coming to an end.

Chief exec Brent Impey using cricket terminology said: “With the company in the process of a sale it is critical, absolutely critical, that management play with a straight bat. If there is a change and we get to a final bidder I am more than happy to sit down and talk to them.”

Impey, a media lawyer who moonlighted for seven years as a national talkback host, brings on-air skills but Kiwi financial markets credit him with a big role in improving financials in the broadcaster. He was tied with the company when CanWest floated 30% of the company in 2004.

It was disclosed this week that if CanWest sells out, goes below 30% or is no longer the biggest shareholder, the company will pay Impey $NZ 3 million ($2.25 million).

The deal is linked to his taking 2% of growth in the enterprise value of the company from the 2004 float to any sale.

Based on current estimates CanWest New Zealand’s enterprise value is $507 million, which is up $103 million since the share float. On that basis Impey looks likely to pocket the $2.25 million maximum from any sale.

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