Consolidation in the wind after ARN Media selldown

KIIS FM breakfast hosts Jackie ‘O’ Henderson and Kyle Sandilands.

Perpetual’s selldown in ARN Media last week has some thinking once again about consolidation in the broadcasting industry.

The Australian listed funds management business offloaded a stake of about 6 per cent through Aitken Mount Capital Partners, which means it is no longer a substantial shareholder in the owner of radio stations such as KIIS and The Edge.

ARN had earlier pounced on a rival, buying a 14.8 per cent stake in Southern Cross Media at $1.08 per share.

At the time the move left some shareholders perplexed.

The Southern Cross share price is now at 72c, with its market value at $172m.

ARN would not be permitted to buy Southern Cross Media under the current media laws, because it breaches the rule forbidding having more than two licences in the market. If ARN bought it, it would have to sell a lot of its own assets.

ARN always said its acquisition was based on value.

But some think a shake-up is coming for some of the smaller media players, because they’re now so cheap that break-ups, reorganisations and acquisitions make sense.

Even if traditional media is a sunset industry, it’s a long sunset, according to some opportunists in the market.

ARN Media is now worth $240m, while Seven West Media $489m.

Seven West Media has made no secret of its interest in both companies, with ARN thought to be the preferred choice.

The market saw opportunistic buying last week. After Pact shares fell to 68c, majority shareholder Raphael Geminder made a takeover bid.

ARN Media is now worth $240m while Seven West Media $489m.

Seven West Media has made no secret of its interest in both companies, with ARN Media thought to be the preferred choice.