Southern Cross Austereo shares lift after Kroll backs Seven West Media merger
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More news: Shares in Southern Cross Austereo lifted in morning trade after risk advisory firm Kroll Australia found that its proposed all-scrip merger with Seven West Media would be in the best interest of shareholders.
At 10:52am AEDT, shares in Southern Cross had lifted 2.4% to 84.5 cents each and were up about 34.1% in the year to date.
Kroll highlighted that the proportion of ownership that Southern Cross shareholders would own in the new combined entity was commensurate with estimates of the company’s contribution to underlying value.
The independent assessment also highlighted potential cost synergies at an annualised full run-rate of $25 million to $30 million per annum on a pre-tax basis within 18 to 24 months of the merger.
Kroll backs Southern Cross-Seven merger, says deal fair despite no shareholder vote
The news: Risk advisory firm Kroll Australia has found that the all-scrip merger between Southern Cross Austereo and Seven West Media is in the best interests of Southern Cross shareholders, who will not be given the opportunity to vote on the deal.
The numbers: Under the proposed merger, Seven shareholders will receive 0.1552 Southern Cross shares per Seven share they own. When implemented, Southern Cross shareholders will own 50.1% of the combined entity while Seven shareholders will own 49.9%.
By Kroll’s estimates, the relative contribution in underlying value of Southern Cross to the proposed combined entity ranges between 46.7% and 47.3%. Kroll also estimates that the value per share contribution by Southern Cross could fall between 42.2% and 51.9% of the combined entity.
Kroll considers the scheme to be fair to Southern Cross shareholders as their “proposed proportionate ownership in the combined group” falls within the relative contribution ranges.
The context: Kroll was appointed to undertake the independent assessment by Southern Cross, with the deal conditional on it being in the best interest of shareholders.
The deal is now expected to be implemented before 2 December 2025, given that based on the expected date of registration with the corporate regulator of the scheme booklet. This would set the Southern Cross fiduciary right deadline on or around 26 November.
The lack of a vote on the deal has been criticised by shareholders, but the exemption is permitted under ASX listing rules.
The source: ASX
