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SYDNEY - Shares in APN News & Media have fallen today after the media group confirmed that its parent, Independent News & Media PLC (INM), has abandoned the sale of its shareholding in the company.
Irish media baron Tony O'Reilly's INM has confirmed it has given up a two-month attempt to sell its 39.1 per cent stake in APN, the owner of a number of Australasian radio stations and newspapers.
APN's shares were down 10 cents, or 4.65 per cent, at $A2.05 early this afternoon, after hitting an earlier low of $A2.01.
The Dublin-based INM, which publishes the Independent newspapers in Ireland and Britain, said it had a number of expressions of interests in its APN shareholding.
But the continued deterioration of credit markets had made it impossible for the company to find a buyer able to secure financing and to pay an "acceptable" price.
The Irish company now plans to sell non-core assets to help pay off debts totalling euro 1.4 billion (A$2.8 billion).
In New Zealand, APN publishes The New Zealand Herald in Auckland, ten regional daily newspapers, the Listener, Woman's Weekly, and nzherald.co.nz.
It also owns The Radio Network, which operates more than 120 radio stations around New Zealand.
"We note the comment by INM that there was significant interest in APN and its quality portfolio of media assets, and the fact that the process instituted by INM in October has been impacted by the difficult credit markets globally," APN said in a statement on Tuesday.
EL&C Baillieu senior analyst Ivor Ries said it would have been extremely challenging for INM to find a buyer in the current economic climate.
"There is not a lot of demand around for newspapers at the moment," Ries said.
"It's very difficult to get bank finance for any kind of acquisition at the moment, and I imagine trying to get bank finance to purchase a chain of newspapers would be almost impossible."
Ries said the decline in print display and classified advertising has severely impacted newspaper profits.
"Particularly overseas you're seeing stunning declines in print advertising.
"It hasn't happened to the same extent here, but people are worried that it's going to happen."
APN issued a profit warning in November, a week after INM's stake in the company was put up for sale.
APN said on November 11 it expected net profit for calendar 2008 to come in at the lower end of the consensus analyst forecast for a net profit of A$148 million.
That would be about 11.4 per cent below its net profit result of $167 million in calendar 2007.
APN has forecast profit for calendar 2009 to be broadly in line with calendar 2008.
APN is due to release its full year 2008 results on February 25.
- AAP