Moody's: Acquisition negative for Nine Entertainment

Moody's Investors Service said that Nine Entertainment Co. Holdings Ltd.'s agreement to i) acquire WIN Corp.'s Adelaide station for around A$140 million and ii) secure the rights to international cricket games for five years for a total of A$400 million in cash plus A$50 million in contra fees are credit negative but have no immediate ratings impact.

"Overall we expect that the recent announcements will result in a modest deterioration in metrics compared to its previous expectations but will remain within the tolerance levels set for the rating," said Maurice OConnell, a Moody's senior analyst and vice president.

"The separate exercise of an option to acquire WIN's Perth business for potentially around A$225 million in the future could also still be accommodated within the existing tolerance set for the rating, should it proceed. However, the increased risk profile now also encompasses the view that the appetite for debt-funded acquisitions increases uncertainty and diminishes the earlier expectation of a stable business profile," added OConnell.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.