Southern Cross Media shares up after rejecting takeover bid
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More news: Southern Cross Media shares were up 1.55% to $0.99 by 12:52pm AEDT, following its announcement that it had rejected ARN Media and Anchorage Capital Partners' bid to acquire the company.
Southern Cross said financial and commercial due diligence information it recently received from the consortium significantly reduced the value of the proposal and that the bid was not in the best interests of shareholders.
Southern Cross rejects takeover bid from ARN Media and Anchorage
The news: Southern Cross Media Group has rejected ARN Media and Anchorage Capital Partners’ bid to acquire the company as it believes it is not in the best interests of shareholders.
The numbers: Last October, ARN and Anchorage offered to acquire 100% of the fully diluted share capital of Southern Cross for 0.753 shares in a reconstituted company following re-allocation of SCA and ARN assets (ARN Newco) and 29.6 cents cash per share.
The context: Southern Cross has dragged its feet in making a decision on the buyout offer and last week it was reported that its major shareholders had called an EGM to oust the board over the slow decision. However, Southern Cross knocked back the claims and said it had not received an EGM notice and that it had not made a decision because it had not received financial and commercial due diligence information from the consortium to complete its assessment.
Today, Southern Cross announced to the ASX that it after receiving additional materials on 1 March for due diligence it had “become apparent that there have been fundamental changes to the economics of the indicative proposal, including an increase in the leverage and reduction in the earnings base of ARN Newco, from that indicated in the original proposal”.
The media group noted that this had significantly reduce the value of the indicative proposal to shareholders.
What they said: “The SCA board has concluded that the current terms of the indicative proposal undervalue SCA and, as a result, the indicative proposal is not in the best interests of SCA shareholders,” the announcement said.
Southern Cross chair Rob Murray said: “We are open to considering proposals from the consortium or other parties that would deliver fair value and be in the best interests of all our shareholders”.
The source: ASX announcement
