Southern Cross rejects 'incorrect and misleading' media report
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The news: Southern Cross Media has flagged "several factual inaccuracies" with a media report suggesting that its long-term contract with Australian Traffic Network (ATN) is proving off-putting to potential suitors.
The numbers: On Wednesday, the Australian Financial Review reported that Southern Cross' eight-year-old contract with traffic report provider ATN "appears to have morphed into a so-called poison pill".
The AFR wrote that the $100 million traffic data sharing agreement signed between the companies in 2016 "contains a slew of clauses that are proving to be unpalatable to suitors", including a change of control payment that would be due to ATN should Southern Cross field a bid for 100% of the business.
The context: Southern Cross confirmed that the contract deals with the circumstances if it wished to terminate, amend or no longer fulfil its obligations, which would be the case if the company were to sell its radio stations.
However, the media group said the contract would not be affected by any change in control, including a takeover bid or scheme of arrangement involving an acquisition of 100% of its shares.
Southern Cross also rejected claims by the AFR that the company failed in its disclosure obligations in relation to the ATN contract.
What they said: "The AFR article is materially incorrect and misleading in this respect," Southern Cross said in an ASX announcement.
"The ATN contract is not relevant to [Southern Cross'] current negotiations regarding the sale of its television assets."
The sources: ASX announcement, AFR
