ARN Media lifts bid for Southern Cross Media Group

ARN Media has sweetened its offer for Southern Cross Media Group. Picture: iStock

ARN Media has lifted its offer for rival radio broadcaster Southern Cross Media Group by about $25m to almost $250m in the hope of getting a deal across the line.

ARN Media, which has the KIIS and Pure Gold radio network, will now offer 0.87 ARN shares for every Southern Cross share as well as 29.6c cash paid by bidding partner Anchorage Capital Partners after earlier offering 0.753 ARN shares and 29.6c a share cash.

Based on the last closing price of ARN shares prior to the indicative proposal being made, the revised proposal would imply up to 10c of extra value per fully diluted Southern Cross share, ARN Media said.

The offer is subject to Southern Cross Media management validating its financial forecasts for the second half of the 2024 financial year, due diligence and full responses to PwC’s outstanding requests for information relating to their financial due diligence on Southern Cross Media, on behalf of the consortium.

Based on the last closing price of ARN Media shares before the indicative proposal was made last year, the initial indicative proposal implied a total value of 94c, or $225.5m.

This was a 29 per cent premium to the undisturbed Southern Cross Media share price of 73c on October 17.

That offer was rejected.

ARN said in a statement on Friday that since the offer was made, Southern Cross Media’s revenue had declined in its broadcast radio and television operations and there had been a reduction in its earnings for the first half of the financial year relative to the previous corresponding period and broker estimates, offset by a cost-out program.

A number of shareholders in ARN Media also own shares in Southern Cross and are keen for a merger to proceed.

Spheria Asset Management has been calling for a meeting to replace chairman Rob Murray from the Southern Cross Media board on the back of frustration that an agreement has not been reached.

Southern Cross owns a regional television broadcaster and has the Triple M and Hit radio network brands.

Shares on Friday were trading at 97c while ARN Media shares were trading at 82c.