The Market Herald: Media company and HotCopper owner to issue … – The Australian Financial Review


The Market Herald, which owns online stock forum HotCopper, will issue new stock to raise $15 million, as the company’s father-son minority owners hope to pay down its debt.
In an announcement to the ASX on Tuesday, the media firm said it would soon launch a renounceable entitlements offer, giving shareholders the chance to buy one new share for every six held.
The Market Herald, the ASX-listed owner of Hot Copper and Gumtree. 
The shares would be offered at 34¢ apiece, underwritten by WA mining businessmen David and Gavin Argyle, the father-son duo who are minority shareholders. The Market Herald’s share price was at 40¢ before the company was put in a trading halt on Monday.
It’s the latest move in a period of drama. The Argyles moved against the company’s founder and CEO Jag Sanger over his plan to pay off a $60 million vendor loan taken on last year to acquire Gumtree, CarsGuide and Autotrader, according to people familiar with the matter.
Under Mr Sanger, The Market Herald bought the three well-known classified mastheads from Norwegian firm Adevinta, which issued the vendor loan to the Australian company to complete the purchase.
Former CEO Jag Sanger. 
The company’s founder had lofty ambitions to turn The Market Herald into a premium media brand, telling investors in November of its ambition to be like the New York Times, The Wall Street Journal or the Financial Times in the Asia-Pacific region.
“We are a gateway to the most affluent people in the country and with Gumtree, now all of Australia,” Mr Sanger said in the presentation.
It runs the trio of classified business as well as a business news website and HotCopper, one of the most-well known online destinations for people to share information and speculate on Australian small- and mid-cap stocks.
Along with offering digital advertising, the company gave access to clients to its network through email lists. Last year, The Market Herald made a loss of $1.85 million on an EBITDA basis, on $28 million in revenue.
But The Market Herald’s minority owners were behind a move to issue a section 249D notice against Mr Sanger, who left the company in December. Since then, the Argyles have pushed back the re-payment of the loan to this year.
According to the announcement on Tuesday, The Market Herald will use the $15 million from the new stock offered to shareholders to re-pay the loan to Adevinta.
It said the Argyles would under-write the offer if the new stock is not bought by shareholders. The company’s board has previously appointed Gumtree’s chief financial officer Tommy Logtenberg as The Market Herald’s acting CEO.
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