ARN tries to stop sale of its stake in Southern Cross Media Group

The bid for ARN to take over Southern Cross has hit a major roadblock and now faces a significant delay over a decision forcing it to sell shares.

ARN’s networks include some of the country’s most successful broadcasters, including Sydney breakfast duo Kyle Sandilands and Jackie ‘O’ Henderson at KIIS 1065.

ARN Media – the owner of radio networks including KIIS FM and Gold – is seeking a review of a decision by the Takeover Panel that forced the media company to sell a significant portion of its shares in Southern Cross Media.

In a market announcement on Monday, ARN – which is led by chairman Hamish McLennan and chief executive Ciaran Davis – requested a review of the ­decision, which slowed down ARN’s planned takeover of Southern Cross, announced in October.

The order by the panel requires the sale of almost half of ARN’s 14.8 per cent stake in Southern Cross, after it paid $38.3m in June.

In its decision the Panel said it “made orders to the effect that the 6.83 per cent of Southern Cross shares acquired by ARN Media Limited in contravention of s606 are vested in ASIC for sales”.

ARN, which is backed by private equity firm Anchorage Capital Partners, purchased 35.5 million shares in Southern Cross. The order requires the media company to release more than half its stake, which equates to 16.3 million shares (6.8 per cent of Southern Cross shares).

ARN’s networks include some of the country’s most successful broadcasters, including Sydney breakfast duo Kyle Sandilands and Jackie ‘‘O’’ Henderson at KIIS 1065, who recently reportedly signed a 10-year contract worth more than $20m.

ARN Media CEO Ciaran Davis.

In ARN’s statement to the ASX on Monday it stated: “The orders for sale of the shares are on terms that come into effect in three business days.

“ARN also intends to have the orders issued today reviewed (and intends to apply for the orders for the sale of shares to be stayed while they are reviewed.)

“ARN will keep the market informed of the outcome of its review application to the Panel.”

On November 24 ARN applied to the Takeovers Panel for a review of the declaration made by the panel.

The Takeovers Panel decision was made after Southern Cross shareholder Keybridge Capital argued that a stake purchased by ARN in June was done so ­illegally.

Fund manager Allan Gray has also been ordered to sell some of its shares, amounting to 0.08 per cent of Southern Cross, within three months.

ARN owns 58 radio stations across 33 markets, 46 DAB+ ­stations and also has a digital entertainment platform called iHeartRadio.

Southern Cross has 99 stations across the Hit and Triple M networks and also has a growing digital platform, LiSTNR.

Both ARN and SCA were contacted about the matter on Monday but would not comment.

Originally published as ARN tries to stop sale of its stake in Southern Cross Media Group