ARN Media, owner of radio networks including KIIS, Pure Gold (WSFM, Gold 104.3, Cruise 1323) and CADA, alongside private equity firm Anchorage Capital Partners (ACP), has made a non-binding offer to acquire Southern Cross Austereo (SCA), which it has valued at $330 million.
SCA operates a national radio network, largely comprising the Hit and Triple M brands across capital city and regional markets, and regional TV affiliates across five states, the ACT and Northern Territory.
SCA relays the Ten Network to regional Queensland, Southern NSW and ACT and regional Victoria, and operates the Seven Network affiliates in Tasmania, Darwin and remote/central Australia.
SCA also has half-share of the Ten channels in Tasmania, Darwin and remote/central Australia and has a commercial monopoly of all three commercial networks in Spencer Gulf/Broken Hill.
ARN has also recently bought a 14.7 per cent stake in SCA for $38.3 million and, under this new proposal, SCA shareholders would receive 0.753 ARN shares and 29.6 cents cash per SCA share.
In its announcement to the Australian Stock Exchange, SCA says “The proposal is unsolicited, complex, and highly conditional. SCA recommends shareholders take no action in relation to the Indicative Proposal from ARN and ACP. The Indicative Proposal is subject to the unanimous recommendation of the SCA Board, due diligence, shareholder and regulatory approvals from both the ACCC and ACMA, and other terms and conditions. The Board of SCA will consider the Indicative Proposal and has appointed Grant Samuel as its financial adviser and Corrs Chambers Westgarth as its legal adviser to help assess the Indicative Proposal. SCA will update shareholders as required.”
Should SCA accept the offer, ARN will retain KIIS, Triple M and 88 regional radio stations, while ACP will have independent control of the remaining assets including SCA’s television and digital audio businesses and 35 radio stations.
SCA was formed in 2011 by the amalgamation of the former Austereo radio network and Macquarie Media, which was formed by Macquarie Bank’s purchases of the former Southern Cross Broadcasting, RG Capital and DMG Regional Radioworks media groups.
The Southern Cross entity dates back to the 1980s as the owner of regional stations BCV8 and GLV8 in Victoria and TNT9 in Launceston. It expanded into radio and through regional television aggregation and a series of acquisitions it expanded across all states except Western Australia.