Independent News & Media Regulatory News (INM)

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITIES, NOR SHALL THERE BE ANY SALES OF THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAW OF SUCH JURISDICTION. THE DISTRIBUTION OR PUBLICATION OF THIS ANNOUNCEMENT IN JURISDICTIONS OTHER THAN IRELAND OR THE UNITED KINGDOM MAY BE RESTRICTED BY LAW AND THEREFORE PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, SUCH RESTRICTIONS. ANY FAILURE TO COMPLY WITH THE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF ANY SUCH JURISDICTION.

Independent News & Media PLC ("INM" or "the Company")

Agreement to sell entire shareholding in APN News & Media Limited ("APN")

Dublin/London 19 March, 2015: Independent News & Media PLC (INM ID, INM LN) announces that it has entered into an agreement with Credit Suisse (Australia) Limited ("Credit Suisse") in respect of the sale, by way of an underwritten block trade, of 191,541,073 ordinary shares in APN, being the entire holding of INM in APN ("INM Shareholding in APN") and representing 18.6% of the issued share capital of APN (the "Sale"). The INM Shareholding in APN is held through two wholly owned subsidiaries Independent News & Media (Australia) Limited ("INMAL") and News & Media NZ Limited ("NMNZ").

Under the terms of the agreement giving effect to the Sale (the "Sale Agreement"), Credit Suisse has agreed to acquire, or procure the acquisition by third party purchasers of, all of the INM Shareholding in APN at a fixed price per APN ordinary share ("APN Share") of AUD$0.88, representing a 6.4% discount to the closing price of AUD$0.94 per APN Share on the ASX on 18 March, 2015 (the latest date prior to the halt in trading in APN Shares on the ASX in connection with this transaction). At the prevailing AUD$/€ exchange rate this equates to approximately €0.63 per APN Share and means that the Company will realise gross cash proceeds from the sale of approximately €121.3 million. Net proceeds are expected to be approximately €115.0 million.

The Sale will be completed in 2 tranches with tranche 2 of the Sale being subject to approval of the Company's shareholders ("Shareholders"). See below for further details.

All of the net proceeds of the transaction will be applied to repay INM group ("INM Group" or "Group") indebtedness in full (being €125.5 million total borrowings (Net Debt: €89.3 million) as at 31 December, 2014 and approximately €115.5 total borrowings immediately prior to the Sale (following the previously notified release of €10 million South African warranties)), thereby categorically completing the deleveraging strategy pursued by the INM Group over a number of years and releasing INM from the restrictions on its activities (in terms of acquisitions, dividends and distributions, share issuance, share buybacks, capital expenditure and financial covenants), which prevailed under the terms of the Group's s debt facilities.

Following completion of the Sale and the stated application of the proceeds, it is intended that the Group will put in place a lower cost, revolving credit facility, providing it with enhanced flexibility in relation, inter alia, to the opportunities to invest in digital strategy, including potentially in relation to bolt-on acquisitions/investments.

Commenting on the Sale, Robert Pitt, Group Chief Executive Officer of INM stated:

"INM has been a shareholder in APN for a significant period and has enjoyed a strong relationship with its Board and management team. Following the announcement of INM's preliminary results for 2014, this is an appropriate time for INM to realise the value of its investment, thereby enabling the INM Group to repay all of its indebtedness and focus on its island of Ireland business strategy, build on current performance and position it for further development at a time of economic recovery in Ireland."

Details of the Sale

The Sale will be completed in 2 tranches as provided for in the Sale Agreement. The Sale Agreement is subject to customary conditions and termination events for an agreement of this nature.

Tranche 1 of the Sale (86,682,073 APN Shares, representing 8.4% of the issued share capital of APN and 45.3% of INM's shareholding in APN) is at a price of AUD$0.88 per APN Share and is expected to complete on or about 25 March, 2015 ("Tranche 1"). Tranche 1 is conditional on the Sale Agreement not having been terminated prior to 25 March 2015. On completion, Tranche 1 will realise approximately AUD$76.3 million (approximately €54.9 million) before expenses for INM. Tranche 1 is of a size such that it can be completed under the Listing Rules of the Irish Stock Exchange and the Listing Rules of the Financial Conduct Authority (together the "Listing Rules") without Shareholder approval.

Tranche 2 of the Sale (104,859,000 APN Shares, representing 10.2% of the issued share capital of APN and 54.7% of INM's shareholding in APN (being the remainder of the INM shareholding in APN)) is at a price of AUD$0.88 per APN Share ("Tranche 2"). Completion of Tranche 2 is conditional on (i) the approval by Shareholders of Tranche 2 pursuant to its classification as a Class 1 transaction under the Listing Rules (ii) expiry of certain notice periods and (iii) the Sale Agreement not having been terminated prior to 3 June, 2015. Approval of Shareholders for Tranche 2 will be sought at an extraordinary general meeting of the Company (the "EGM") to be convened as soon as practicable following approval of the circular in accordance with the Listing Rules. On completion, Tranche 2 would realise approximately AUD$92.3 million (approximately €66.4 million) before expenses for INM.

The Company has received irrevocable undertakings and/or letters of intent to vote in favour of the EGM resolution approving completion of Tranche 2 (the "Resolution") in respect of in aggregate 743,810,727 ordinary shares in the Company ("Ordinary Shares"), representing in aggregate approximately 52.9% of the issued ordinary share capital of INM (excluding treasury shares). As the Resolution will be an ordinary resolution requiring a simple majority of Shareholders voting in person or by proxy to be passed, voting by the relevant persons in accordance with the terms of the voting undertakings and/or letters of intent would be sufficient to ensure that the Resolution would be approved. Securing such support for Tranche 2 of the Sale was considered necessary in order to contribute to the Company securing an optimum price for its APN Shareholding pursuant to the Sale.

 About APN

APN is a leading provider of outdoor advertising in Australia and New Zealand and also has operations in Hong Kong. In New Zealand, APN has three of the top five national radio networks with NewsTalk ZB, The Hits and Coast as well as four additional major networks. In Australia, its major metro radio networks are KIIS and Pure Gold, as well as Sydney station The Edge 96.1. APN publishes almost 20 daily and more than 80 non-daily newspapers, as well as over 50 websites, mobile sites and apps across Australia and New Zealand. In New Zealand, APN publishes The New Zealand Herald. In Australia, APN focuses on providing relevant and engaging publications in Australia's regions. APN is expanding its digital potential and also has large printing businesses in Australia and New Zealand.

As at 31 December, 2014 APN had gross assets of AUD$1,128 million (2013: AUD$1,254 million). For the twelve months ended 31 December, 2014 (the last period in respect of which APN has published financial information) the net profit after tax before exceptional items of the APN Group was AUD$75.2 million (2013: AUD$59.3 million) and profits attributable to shareholders was AUD$11.5 million (2013: AUD$2.6 million). The financial information contained in this paragraph has been extracted without adjustment from the APN annual results in respect of the year ended 31 December, 2014.

APN is accounted for in the accounts of INM as an associate interest and INM's share of APN's net profit is reported in INM's income statement within 'Share of results of associates and joint ventures'. This treatment of APN as an associate in respect of the year ended 31 December, 2014 had regard to the fact that INM has representation on the APN Board of Directors and exercises significant influence.

At 31 December, 2014 INM carried its investment in APN on its balance sheet at an amount of €68.7 million or AUD$0.53 per APN Share held (2013: €86.9 million or AUD$0.70 per APN Share held). For the twelve months ended 31 December, 2014 INM'S income statement reflected APN accounting for €1.1 million under 'Share or results of associates and joint ventures' and a loss of €16.7 million under 'Deemed partial disposal'.

Amounts referred to throughout this announcement relating to the Sale have been converted on the basis of €1:AUD$1.3901, the exchange rate prevailing on 18 March 2015.

For further information, contact:

This announcement is for information purposes only and does not constitute an offer to sell or the solicitation of an offer to sell securities, nor shall there be any sales of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of such jurisdiction.

The distribution or publication of this announcement in jurisdictions other than Ireland or the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. any failure to comply with the restrictions may constitute a violation of the securities laws of any such jurisdiction.

In particular, this announcement is not an offer to sell or a solicitation of an offer to buy securities in the United States, Australia, Canada, Japan, Switzerland or South Africa. The securities referred to in this announcement have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") and may not be offered, sold or transferred, directly or indirectly, within in the United States unless registered under the Securities Act or pursuant to an exemption from, or in a transaction which is not subject to, the registration requirements of the Securities Act.