ARN and Southern Cross shares sink on fresh takeover bid
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More news: Shares in ARN Media and Southern Cross Media Group both plunged in morning trade on the ASX, after ARN unveiled a new takeover offer for Southern Cross as bidding partner Anchorage Capital Partners pulled out of the deal.
ARN shares were down 4.8% to $0.80 by 11:30am AEST while Southern Cross was 6.3% lower at $0.89.
ARN pushes for Southern Cross takeover after Anchorage pulls out of bid
The news: ARN Media has outlined a fresh plan to acquire Southern Cross Media Group despite Anchorage Capital Partners pulling out from the long-running takeover bid.
The numbers: Under its new indicative proposal, ARN will acquire the same radio assets as in the offer plus assume 100% ownership of the combined digital audio assets of ARN and Southern Cross. In return, SCA shareholders will receive 0.87 ARN shares for each share held.
SCA shareholders will also retain equivalent holding in a newly-listed demerged entity to hold the radio and television assets that were to be acquired by Anchorage under the previous proposal. It is open to sale of these assets.
ARN said its new offer is likely to deliver total value of $1.20 per Southern Cross share.
Southern Cross shares last closed at $0.94 while ARN Media last closed at $0.84.
The context: The new offer comes on the heels of the previous bid being withdrawn after Anchorage pulled out from the consortium. The bidding partner attributed the decision to a deteriorating outlook for regional TV and a decline in trading performance since the offer was first made in October. Under that proposal, ARN would have acquired some SCA radio stations, while Anchorage would have taken over the balance in addition to Southern Cross’ television assets and a stake in its digital assets.
On Monday, ARN said it and Southern Cross are substantially complete on mutual due diligence, and are progressed on transaction documentation. To the extent the
ARN Indicative Proposal is supported by the Southern Cross board, ARN considers that a binding transaction could be entered into in coming weeks.
What they said: Southern Cross chair Heith Mackay-Cruise said the collaboration with the initial consortium required considerable cost and management effort.
"It is frustrating that the consortium has now withdrawn its proposal in circumstances where any potential material concerns should have been identified much earlier in the process," Mackay-Cruise said.
"... We remain open to considering proposals that would deliver fair value and be in the best interests of all Southern Cross shareholders."
The sources: ASX announcement, ASX announcement
