Southern Cross Austereo has rejected indicative proposal from ARN Media
The proposed takeover of Southern Cross Media has been rejected but the company continues to be open to further offers.
Southern Cross Media Group has knocked back a planned takeover by ARN Media, saying the move is “not in the best interests of SCA shareholders”.
SCA told the ASX that after months of assessment it had concluded the proposed takeover unvalued the target.
But chair Rob Murray said SCA remained open to a revised offer.
“Our board acknowledges the strategic merit underlying the consortium’s proposal but considers that the current terms of the proposal undervalue SCA,” he said.
“We are open to considering proposals from the consortium or other parties that would deliver fair value and be in the best interests of all our shareholders.”
SCA has 99 stations nationally including the Hit Network and Triple M stations, while ARN Media owns 58 radio stations in 33 markets including KIIS FM and Gold.
SCA chief executive John Kelly and ARN Media boss Ciaran Davis were both in Canberra to attend a Senate hearing on Thursday, to discuss the Copyright Legislation Amendment (Fair Pay for Radio Play) and determine whether the cap on royalties paid to artists and labels should be changed.
ARN Media and Anchorage Capital Partners announced a bid for SCA on October 18 in an attempt to acquire radio and digital assets via ARN Newco and reduce exposure to regional television.
Mr Murray said SCA remained focused on its “audio ecosystem”, including “broadcast radio and digital audio”.
“This is central to our strategy and our value proposition and we are committed to converting our audience-leading positions into sustainable growth and returns to our shareholders,” he said.
At SCA’s half-year results announced last week, Mr Kelly said it had been a “difficult” six months. The company reported a 71 per cent drop in net profit to $4.4m compared to the six months to December 31 the year prior.
ARN Media’s annual profit fell by 33 per cent to $32.3m. It declined to comment on Thursday.
SCA shares rose 1.6 per cent to 98.5c.
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