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Irish media company Independent News & Media plans to sell its stake in Herald publisher APN News & Media.
INM, which is led by chief executive and former British Lions player Sir Anthony O'Reilly, said it had had a number of "unsolicited expressions of interest" in its 39.1 per cent stake.
The announcement sent INM shares soaring over the weekend. The Dublin-based company said the balance sheet impact of the sale could lower its net debt by about ¬800 million ($1.745 billion).
"The INM board believes that the significant proceeds receivable from monetising its shareholding in APN would substantially enhance INM's balance sheet and would be earnings neutral for 2009," it said in a statement.
"[APN's] strategic value has not been fairly reflected in INM's share price, due primarily to the fact that INM doesn't fully control APN's cash flows," INM said.
APN would not comment on the possible sale last night. A spokesman said the publisher would comment this morning.
APN is the publisher of the Herald, Herald on Sunday, the Listener and the Aucklander as well as half owner of Newstalk ZB stable The Radio Network.
It owns regional newspapers including the Bay of Plenty Times, Rotorua Daily Post and the Northern Advocate and is one of is the largest regional publishers in Australia.
INM's second biggest shareholder, Denis O'Brien - a recurring critic of INM management - queried why it would sell "one of the group's best performing assets" in a falling market.
He suggested INM should sell British newspaper the Independent instead as it was "a drain on group resources".
INM owns and publishes more than 200 newspaper and magazine titles and employs about 9700 people in Ireland, Britain, Australia, South Africa, New Zealand and India. It has announced it may cut jobs in the UK as part of a shared services plan with other UK publishers.
Last year, APN shareholders rejected a A$3 billion offer for the entire company led by an INM-headed consortium.
Shares in APN closed at A$2.41 on Australia's ASX on Friday, giving the company a total market value of A$1.2 billion ($1.36 billion). INM's stake is worth about A$460 million.
INM shares jumped 28 per cent to ¬0.64 in trading in Dublin on Saturday, giving the company a market value of ¬537 million. The stock has fallen 73 per cent this year.
