Fairfax to raise about A$96M selling 96FM to APN, merging radio assets with Macquarie

Fairfax Media plans to raise about $A96 million by selling its Perth-based radio station 96FM to APN News & Media and merging its remaining radio assets with Macquarie Radio Network.

APN will acquire 96FM for $A78 million using cash and existing debt facilities, subject to regulatory approvals, rounding out its suite of state capital stations in Australia.

Meanwhile, Fairfax will merge its Fairfax Radio Network unit with ASX-listed Macquarie Radio Network (MRN), generating about $A18 million in cash and giving the Sydney-based media company a 54.5% stake in an enlarged MRN which would remain listed, it says.

That deal is subject to approval by existing MRN shareholders, who would be diluted to 45.5% of the enlarged company.

"The merger creates a genuine national talk radio network that wasn't previously available to advertisers," Fairfax chief executive Greg Hywood says in a statement.

MRN executive chairman and CEO Russell Tate will be executive chair of the enlarged company.

Fairfax Media posted a profit of $A224.4 million in its latest year, compared with loss of $A16.4 million a year earlier, when it took impairments of $A444 million on print assets and intangibles.

In a separate statement, APN says the acquisition of 96FM will make APN's Australian Radio Network "the number 1 metropolitan radio network in Australia," based on radio ratings.

"The acquisition of 96FM continues APN's emphasis on investing in growth assets and demonstrates our belief in radio as a growth medium," chief executive Michael Miller says.

"ARN's leadership team continues to deliver above market growth and we believe that they will deliver strong ratings and revenue growth for 96FM."

APN last month reaffirmed plans to sell shares in its New Zealand media operations, which have been poured into a vehicle called NZME, after the Sydney-based media company took a $54 million impairment against its local newspaper mastheads in its 2014 results.

NZME owns the New Zealand Herald, the Radio Network and GrabOne and APN plans for it to be separately listed on the NZX and ASX.

The dual-listed shares of APN last traded at 78c on the NZX, and 74Ac on the ASX. Fairfax last traded at 83Ac on the ASX.