UPDATE 1-Australia's Nine seeks to raise $570 mln in IPO -source

Wed Oct 30, 2013 11:20pm EDT

* Nine is one of nation's best known media firms

* Shares expected to list Dec. 6

* Indicative price range of A$2.05 to A$2.35 a share

By Jackie Range and Thuy Ong

SYDNEY, Oct 31 (Reuters) - Australia's Nine Entertainment Co Pty Ltd is seeking to raise as much as $570 million in an initial public offering, a person familiar with the process said, a move that will help the troubled TV network pay down debt.

The IPO of one of the nation's best known media firms is expected to be the biggest by an Australian company this year and comes at a busy time for new listings Down Under.

The up to A$600 million offering will have an indicative price range of A$2.05 to A$2.35 a share, the person said, declining to be identified as the process is confidential.

That would give the company, which plans to list on Dec. 6, a market capitalisation of A$1.9 billion to A$2.2 billion, the person added.

Nine avoided receivership with U.S. hedge funds Oaktree Capital Group and Apollo Global Management taking control in a more than $3 billion debt for equity swap.

Contract for difference provider IG is offering a "grey market" which lets its clients trade derivatives ahead of Nine's listing based on where they think the shares will end up after the first day of trading.

"The demand is there... It then gets back to what will the valuation be, most are holding it at 8 to 9 times earnings," said Evan Lucas, IG's market strategist, adding that the valuation was similar to rival Seven West Media Ltd.

A key uncertainty for Nine is its level of debt, said Lucas.

"Most of these TV companies have huge amount of debt and that's always going to be an issue in a situation where you're relying on advertising dollars which is a very demanding and very fluctuating market," he said.

Oaktree Capital, which owns some 28 percent of Nine is expected to offload between 20 percent and 40 percent of its stake, the person familiar with the matter said. Apollo, which owns a reported 26 percent, is expected to hang on to all of its holding.

The IPO prospectus will be lodged on Monday.

A spokeswoman for Nine declined to comment.

The debt-for-equity swap, approved by creditors in January this year, saw CVC Capital Partners Ltd's A$1.8 billion equity investment almost wiped out.

Nine's financial woes took a turn for the worse when the global financial crisis hit as advertising revenues collapsed across the media sector, slashing profits at TV networks.

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