Southern Cross Media Group’s decision to take a look at a potential proposal to fold the Australian Community Media business into the group is likely to be aimed at checking that its digital capabilities are not something that can seriously add company value.
Some were surprised on Tuesday that the Australian radio and regional television broadcaster even entertained the possibility after it so swiftly rebuffed the Antony Catalano-backed business in November when it proposed a merger.
At that time, Southern Cross said regional print and digital assets were not consistent with its strategy.
Now it says that ACM’s latest proposal, where it consists of a proposal for it to buy 14 print and digital news publications, key regional and metro titles and its agriculture division, is materially different.
The Triple M owner would investigate to determine whether it would align with its strategy, “particularly in relation to prospective value in ACM’s digital capabilities … and other potential synergies”.
Expectations are that after considering the offer, the likely outcome will be that the Southern Cross Media Group board will politely decline.
But the thinking is that by at least assessing the offer is a move of diplomacy on its behalf, given Mr Catalano’s interests are a major shareholder and the group has been criticised in the past for not showing a willingness to engage on potential transactions.
The other possibility is that the company is at a cross roads now that the merger with rival radio broadcaster ARN Media has collapsed.
In a declining market, Southern Cross Media needs to do something, and standing still is not an option.
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