Wanting to buy APN News & Media is one thing; being able to come up with the asking price perhaps another, writes Peter Coleman. Dublin and London-based Independent News & Media – which says its own shares are currently undervalued – has had to face up to the fact that would-be purchasers behind the ‘unsolicited approaches’ made for the group’s holding in APN may not be able to proceed. Meanwhile INM itself has felt the need to make a market statement over the “significant and unwarranted decline” in its share price. The company believes the current market capitalisation “does not fairly reflect the true value of the underlying assets, the current trading performance and the inherent profitability and cash-generative nature of its operations. “This is underscored by the international diversity of the group’s publishing, online, radio and outdoor operations across Australia, Hong Kong, India, Indonesia, Ireland, New Zealand, South Africa and the UK.” Full year results for 2008 are due on March 31, and INM says it is updating guidance on its expected results and expected 2009 trading “to address potential misapprehensions in the marketplace”. It points out that more than a third of its total revenues – expected to fall three per cent short on last year – are not advertising-dependent. The statement suggests that earnings on each share (currently valued at 19 Euro cents) may amount to at least 12 cents, excluding exceptionals. “These results demonstrate that – even in tough economic conditions – INM continues to be a profitable and cash-generative business,” says the statement. Strong cost management – particularly in areas such as discretionary costs, newsprint/ consumables, and payroll (both headcount and rate) – have seen Irish and UK staff accept a series of pay reductions for 2009, while INM directors have agreed to a ten per cent reduction in their fees and executive salaries (and no bonuses for 2008). INM holds 39.1 per cent of APN News & Media and says that, with credit market conditions continuing to deteriorate, it had been difficult for interested parties to put together a fully-financed bid for the APN stake (and its individual divisions), “at an appropriate value that would have been acceptable to both INM and to the other APN shareholders”.