Australia's APN Outdoor to raise $289 mln in IPO - source

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SYDNEY (Oct 21): Australian digital billboard firm APN Outdoor will raise A$329 million ($289 million) in an initial public offer, a person with knowledge of the matter told Reuters, at the bottom of the range its private equity owner had hoped to sell for as appetite for new listings wanes in a weaker stock market.

Quadrant Private Equity will sell 129.1 million APN shares - equivalent to 78 percent of the company - for A$2.55 each, said the person who could not be identified because the matter was confidential. An IPO prospectus was lodged with authorities on Monday and gave the scheduled listing date as Nov. 11, the person added.

The sale gives APN Outdoor a market capitalisation of A$425 million, just short of the A$450 million the company would have been worth at the upper end of its original offer range. APN will retain a 22 percent stake, the person said.

Quadrant did not provide an immediate comment when contacted by Reuters. The relevant APN Outdoor executives were not immediately available.

Quadrant had initially proposed pricing the shares between A$2.55 and A$2.75.

Even though the price is at the bottom of the range, the fund is still making an investment return of 57 percent since buying APN Outdoor from its parent, APN News & Media Ltd , for a total A$244 million in two installments in 2012 and 2013, local media reported.

Australia is headed for its biggest year of IPO activity ever, up more than 400 percent in the first nine months of 2014 over the same period last year, according to Thomson Reuters data, as company owners seek to capitalise on what has been until recently a strong share market.

But since closing at a record high in early September the market has lost about 6 percent, hit by reports of slowing demand for resources in China and persistent economic weakness in Europe.

On Monday, Australian finance minister Mathias Cormann said the government has the right to cancel the November listing of state-owned health insurer Medibank Private, worth up to A$5.5 billion, if market conditions worsen.

But the source said the APN listing will proceed regardless of market conditions because it is fully underwritten by joint lead managers Morgan Stanley and UBS.

(1 US dollar = 1.1396 Australian dollar)