Seven West Media, Allegro Funds Management and Anchorage Capital Partners are among the bidders lining up to buy Southern Cross Media Group’s regional television business, sources say.
Grant Samuel is working on the sale for the $406m listed regional television and radio broadcaster, with first round bids due on May 13.
To date, suitors have been provided with limited information in a data room before being offered more detailed material down the track.
One challenge for buyers is likely to be that the regional television unit will not be accompanied by a sales team, with all of those functions operating across radio and television as part of the Southern Cross Media Group.
It leaves the acquirer with the option of creating its own sales management team or embarking on a strategic deal with Southern Cross to provide that service.
The understanding is that Seven West’s interest extends only to the Southern Cross Tasmania television operation.
Seven purchased regional television broadcaster Prime Media for $132m last year and Tasmania is one part of the country currently out of its reach.
Allegro and Anchorage are funds that target turnaround opportunities and have both looked at television assets in the past.
Anchorage made efforts to buy Prime Media while New Zealand’s Sky Network Television has been a target for such funds, with at least one of the two groups said to have been looking.
For the year to June, Southern Cross saw its earnings before interest, tax, depreciation and amortisation soar for its regional television unit by 59.7 per cent to $38.1m and for the six months to December, EBITDA hit $17.5m, up 27.3 per cent. Sources say the company is hoping to achieve a price of about three times the division’s EBITDA.
Conspicuously absent from the contest is media entrepreneur Antony Catalano, who founded real estate website group Domain and has publishing business, Australian Community Media, owns regional publications such as The Newcastle Herald and The Canberra Times.
The understanding is that he will be sitting out the sale process as he remains busy on his latest venture after earlier casting his eye over the operation for a possible purchase.
Mr Catalano and his backer, Alex Waislitz, have been embarking on a back-door listing of investment vehicle IMP through the shell of regional broadcaster Prime Media.
Held in IMP is real estate venture realestateview.com.au
It’s also unclear where the CBS-owned Network Ten stands on the deal. Southern Cross’s television assets have had a two-year deal for an affiliation with free-to-air broadcaster Ten, after previous partner Nine Entertainment opted instead to join forces with Bruce Gordon’s WIN television network.
The sales process is happening at the same time that Southern Cross Media Group’s board has head hunter Korn Ferry engaged to work on succession planning following a seven-year run for Grant Blackley as chief executive.
Free-to-air television broadcasters have seen their market values in decline in recent years as they lose viewers to streamed content and advertisers to other forms of media.
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