IPO for Macquarie media fund

The Australian bank is hoping to raise almost A$1 billion to make controlling investments in global media companies.

Macquarie Bank, Australia’s largest investment bank, has announced plans to list a newly established media fund, Macquarie Media Group (MMG), on the Australian Stock Exchange (ASX).
The fund, which currently holds 85 commercial radio licences in several Australian cities, is intended to raise between A$927 million ($705 million; €589 million) and A$996 million, according to a press release. Shares will be sold in two tranches, the first of which will go on sale on October 19th.
MMG will have a mandate to acquire media assets globally, and will seek to acquire controlling interests in companies with stable cash flows, strong market positions, barriers to entry, and potential for earnings improvement through active management. Its sponsor expects it to be debt free on listing.
Macquarie will retain a 20 percent stake in the fund, and charge a 1.5 percent management fee. The bank will also receive a 20 percent performance fee linked to returns of 6 percent or above.
The fund’s existing portfolio includes Macquarie Regional Networks, the company that the bank formed through the acquisition of Australian companies RG Capital Radio and DMG Regional Radio in September 2004. The bank could not be reached for comment on the kind of assets it was interested in acquiring internationally, but press reports suggest the Australian regional TV operators, as well as businesses in North America, Asia and the UK, will be of interest.