ARN Media to fight forced share sale order

The news: ARN Media will contest a Takeovers Panel decision to force the radio station owner to sell shares it bought in Southern Cross Media. ARN's likely reduced stake will complicate its plans to acquire Southern Cross.

The numbers: The Panel has made orders for ARN to vest 6.83% of the SXL shares it acquired with ASIC for sale. The Panel also accepted an undertaking by fund manager Allan Gray to sell 0.8% of the SXL shares it bought in breach of takeover provisions in the Corporations Act and provide an updated substantial holder notice relating to its stake in Southern Cross.

The context: The Takeovers Panel decision came after Southern Cross shareholder Keybridge Capital complained ARN had acquired a stake in the media company illegally. Allan Gray owned a significant slice of both companies, and after the stock purchase in June its stake in Southern Cross increased to more than 31%, which the panel found could have undue control on the potential acquisition by ARN Media. ARN will keep the market informed of its review application.