Southern Cross rejects ARN's latest takeover bid
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The news: Southern Cross Media Group (SCA) has rejected the latest takeover bid by ARN Media, stating it "does not consider it to be in its shareholders' interests to engage further with ARN".
The numbers: ARN's revised bid — submitted on Monday after the suitor's bidding partner Anchorage Capital pulled out from the long-running takeover effort — offered SCA shareholders around 0.87 ARN shares for each share held.
The proposal would see the formation of a "new ARN", comprising a metro radio network of 10 stations under the KIIS and Triple M brands, and 100% of ARN's and SCA's existing digital audio assets. Meanwhile the "new SCA" would comprise 44 radio stations and SCA's regional TV assets.
ARN said its new offer would deliver total value of $1.20 per SCA share.
SCA's share price was at $0.85 by afternoon trading on the ASX and over the past 12 months has risen $6.25.
The context: SCA said the alternative proposal provides downside for SCA shareholders, "even if the execution challenges could be overcome".
The media group also noted that it had not received any formal proposal from ARN following its announcement that its consortium proposal with Anchorage had been withdrawn.
What they said: SCA chair Heith Mackay-Cruise said: "Under the alternative proposal, SCA shareholders would be left with a minority interest in an expanded ARN business and full ownership of sub-scale commercial radio assets and declining regional television assets, with limited exposure to the fastest growing media sector of digital audio, and with no cash in return".
"Over seven months of engagement, the consortium was unable to deliver its original proposal in an executable form," he said.
Anchorage pulled out from the consortium due to the deteriorating outlook for regional TV and a decline in trading performance since the offer was first made in October.
The source: ASX announcement
