With the company recently announcing that its largest shareholder, the O’Reilly family, has made a ‘preliminary approach’ to privatise the company, it looks like APN News & Media is set to participate in the takeover frenzy gripping the sector. The offer is apparently in partnership with private equity firms—who else?—and will be pitched at about $6 per share. This would value the company at 18 times 2006 forecast earnings which, given the value of its many monopolies and the potential for an eventual auction of the radio business, isn’t particularly generous. The share price is up 21% since issue 206/Aug 06 (Long Term Buy—$4.94) and we’re downgrading to HOLD. We’ll comment further when a formal offer is announced.