Nine Entertainment will boost shareholder returns and consider acquisitions after the $640 million sale of its ticketing and events arm to an Asian private equity giant.
The sale of Nine Live, which controls Ticketek and Sydney's Allphones Arena, to Hong Kong-based Affinity Equity Partners is expected to deliver the broadcaster $600 million in proceeds.
With the federal government considering changes to cross media ownership rules, chief executive David Gyngell hinted that could be used to fund an acquisition.
"It puts us in a position to give great returns to shareholders and look at any sensible opportunities that come about," he told The Australian.
Nine will lift the proportion of net profit it delivers to shareholders through dividends next financial year, from the current ration of 50 to 60 per cent, to between 80 and 100 per cent.
It will also increase the size of its recently announced share buyback, originally worth $150 million.
Nine said the sale would allow it to focus on its free-to-air TV, digital and streaming businesses.
Bell Direct equities analyst Julia Lee said the deal puts Nine in a stronger position to consider acquisitions.
"This is great news for shareholders given how attractive dividends are in a global market where that hunt for yield is king," she said.
"It definitely does boost the balance sheet and the potential for acquisitions."
IG markets strategist Evan Lucas said the "very healthy premium" could also pay off Nine's net debt, which stood at $491 million on December 31.
"It also makes Nine now net cash positive - that's something 18 months ago you couldn't even think of, they almost went broke," he said.
Nine Entertainment shares enjoyed their best session in almost two months, gaining eight cents, or 3.7 per cent, to $2.23.
Amid talk of media ownership law changes, Mr Gyngell and other top industry executives are meeting with Prime Minister Tony Abbott late on Thursday.
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