ARN has teamed up with private equity firm Anchorage to buy the rival radio broadcaster, having taken a 14.9 per cent stake a few months ago.
ARN Media has teamed up with private equity firm Anchorage Capital Partners to lob a $225 million non-binding takeover offer for rival radio broadcaster Southern Cross Media.
ARN owns major radio stations including KIIS FM, home to Kyle and Jackie O, while Southern Cross houses the national Hit and Triple M networks.The companies confirmed in statements to the ASX on Wednesday morning that ARN and Anchorage had made an indicative proposal under which Southern Cross Media shareholders would receive 0.753 ARN shares and 29.6 cents in cash for each Southern Cross share they own.
That implies a total value of 94 cents per Southern Cross share. The stock closed at 73 cents on Tuesday, putting the offer at a 29 per cent premium to the company’s last share price. With 239.9 million shares on issue, it means the bid values Southern Cross at $225.5 million.ARN said in its announcement that it planned to separate Southern Cross’s assets and its own into two national media organisations “that will compete independently of each other on metro and regional radio”.
The managing director of ARN, Ciaran Davis, said there was a significant opportunity to create shareholder value by bringing together both brands. “ARN is ideally positioned to support and operate an expanded regional radio network and as a combined group of scale in digital audio, positioned to compete efficiently and effectively with international competitors,” Davis said.ARN is currently in the process of finalising negotiations for an extended 10-year contract for Kyle and Jackie O, which could include an extension of their broadcast into the Melbourne market.
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