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MediaWorks held sales talks

JAMES CHESSELL, JAKE MITCHELL AND STUFF REPORTERS
Last updated 07:56 18/08/2014

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MediaWorks held talks on selling earlier this year but couldn't agree on price, say inside sources.

The owners of the television and radio group discussed a potential sale with trade buyers, including Australia's Seven West Media.

But MediaWorks seems more likely to join the growing list of media companies looking to join the stock exchange.

It is understood MediaWorks' controlling shareholder - US hedge fund Oaktree Capital - held informal and preliminary talks with Seven West and other media groups earlier this year about taking an equity stake in the Auckland-based business.

Sources close to the discussions said the parties were unable to "get close on price", meaning Oaktree was likely to push ahead with a float when it believes it can maximise price.

Nevertheless, the discussionssuggest the Los Angeles-based investor, which is also a major shareholder in Australian media company Nine Entertainment, is a willing seller.

A MediaWorks float would mean media companies worth about A$2.2 billion (NZ$2.4b) were considering sharemarket listings in Australia and New Zealand.

Other float candidates include the A$900 million cinema chain Hoyts Group, which appointed investment banking adviser UBS last week, and outdoor advertising companies oOh! Media and APN Outdoor, thought to be worth about A$500m each.

Oaktree and fellow US hedge fund Apollo Global Management are also expected to sell at least some of their combined A$717n stake in Australia's Nine over the next 12 months.

MediaWorks owns two television stations, TV3 and Four, and radio stations which include The Rock, MoreFM and RadioLIVE in NZ.

The company effectively collapsed in the middle of last year due to high levels of borrowings, allowing debt holders such as Oaktree to take control.

Oaktree lifted its stake to 43 per cent in November last year - the same time a recapitalisation process reduced debt levels.

The new MediaWorks company is chaired by Australian Rod McGeoch, who led the successful bid for the 2000 Sydney Olympics.

Industry sources pointed to the August appointment of former NZX chief executive Mark Weldon as the new boss of MediaWorks as further evidence the business was being prepared for a float.

Weldon has extensive capital markets - but no media - experience.

"Oaktree got many media companies to kick the tyres a few months back and didn't get a decent offer and now they are prettying it up for a float," one source said .

A spokesman for MediaWorks said: "MediaWorks has no immediate plans for an IPO - being focused on creating value for our owners - but are confident, however, that this business would be well supported if it were to pursue an IPO."

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