Australia's Nine seeks to raise $570 mln in IPO -source

Reuters

* Nine is one of nation's best known media firms

* Shares expected to list Dec. 6

* Indicative price range of A$2.05 to A$2.35 a share

By Jackie Range and Thuy Ong

SYDNEY, Oct 31 (Reuters) - Australia's Nine Entertainment CoPty Ltd is seeking to raise as much as $570 millionin an initial public offering, a person familiar with theprocess said, a move that will help the troubled TV network paydown debt.

The IPO of one of the nation's best known media firms isexpected to be the biggest by an Australian company this yearand comes at a busy time for new listings Down Under.

The up to A$600 million offering will have an indicativeprice range of A$2.05 to A$2.35 a share, the person said,declining to be identified as the process is confidential.

That would give the company, which plans to list on Dec. 6,a market capitalisation of A$1.9 billion to A$2.2 billion, theperson added.

Nine avoided receivership with U.S. hedge funds OaktreeCapital Group and Apollo Global Management taking control in a more than $3 billion debt for equity swap.

Contract for difference provider IG is offering a "greymarket" which lets its clients trade derivatives ahead of Nine'slisting based on where they think the shares will end up afterthe first day of trading.

"The demand is there... It then gets back to what will thevaluation be, most are holding it at 8 to 9 times earnings,"said Evan Lucas, IG's market strategist, adding that thevaluation was similar to rival Seven West Media Ltd.

A key uncertainty for Nine is its level of debt, said Lucas.

"Most of these TV companies have huge amount of debt andthat's always going to be an issue in a situation where you'rerelying on advertising dollars which is a very demanding andvery fluctuating market," he said.

Oaktree Capital, which owns some 28 percent of Nine isexpected to offload between 20 percent and 40 percent of itsstake, the person familiar with the matter said. Apollo, whichowns a reported 26 percent, is expected to hang on to all of itsholding.

The IPO prospectus will be lodged on Monday.

A spokeswoman for Nine declined to comment.

The debt-for-equity swap, approved by creditors in Januarythis year, saw CVC Capital Partners Ltd's A$1.8 billionequity investment almost wiped out.

Nine's financial woes took a turn for the worse when theglobal financial crisis hit as advertising revenues collapsedacross the media sector, slashing profits at TV networks.

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