News Corp has emerged as a substantial shareholder in APN News & Media ((APN)) with a 14.99% interest. This stake comes after APN’s largest shareholders – Independent News & Media and Baycliffe – announced the sale of shares via a block trade.
Given News Corp’s significant cash balance Deutsche Bank does not view the acquisition as material but it does signal a commitment to the Australian market.
In the broker’s view, the company is also looking to remain relevant in any sector consolidation in the media market in Australia, particularly if changes to media ownership legislation take place.
A Buy rating and $23.00 target are retained.
Target price is $23.00.Current Price is $21.49. Difference: $1.51 – (brackets indicate current price is over target). If NWS meets the Deutsche Bank target it will return approximately 7% (excluding dividends, fees and charges – negative figures indicate an expected loss).