Regional newspaper, radio and outdoor advertising company APN News and Media Limited (ASX: APN) has exited a trading halt today and immediately its share price has jumped 10 cents to 54 cents – representing a gain of 22.7%.
The media firm entered a trading halt on Wednesday at which time it released its full-year results which showed a 10% increase in net profit to $59.5 million. It also announced that it was buying the remaining 50% share of its radio businesses ARN and TRN for $246.5 million from Clear Channel and announced a fully underwritten capital raising.
The institutional portion of the capital raising was well supported at 36 cents per share which represents a discount of 12.5% to the theoretical ex-rights price of 41 cents. The retail component will open next week and judging by today’s rally will be very well supported.
Today’s rally means that APN’s share price – like Fairfax Media Limited’s (ASX: FXJ) which experienced a strong rally yesterday after releasing an impressive set of half-yearly results – are both now pushing into new 52-week high territory. Newspaper assets in particular have been out-of-favour with the market for years now, this scenario has attracted contrarian investors to APN and Fairfax. Those contrarian investors who were prepared to stand apart from the crowd are this week enjoying the rewards.
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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
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