Southern Cross Media Group says it will consider ARN Media offer

A proposal by ARN Media to acquire Southern Cross Media Group is becoming more likely following a revised offer.

ARN Media chief executive officer Ciaran Davis and Southern Cross Media Group managing director and chief executive officer John Kelly. Photo: Supplied.

Southern Cross Media Group has confirmed it will consider a new takeover bid by rival media company ARN Media in a move which could finally result in the acquisition occurring.

In an ASX announcement released on Monday, SCA confirmed it “has reviewed the revised indicative proposal” and the company will re-engage with ARN Media and Anchorage Capital Partners to determine whether it will proceed with the new offer.

The offer includes 0.87 ARN Newco shares in the new entity and in addition to this a proposed 29.6 cents per share.

Earlier this month SCA, which has 99 stations including the Hit Network and Triple M stations and is led by chief executive John Kelly, knocked back a planned takeover by ARN Media and Anchorage after it said the takeover was undervalued.

Despite this, SCA chair Rob Murray said at the time he was open to a revised offer.

ARN Media is headed up by CEO Ciaran Davis and it owns 58 radio stations including KIIS FM and Gold.

SCA chair Rob Murray said on Monday: “The consortium’s revised proposal will provide a significant increase in the consideration for SCA shareholders and the SCA Board is willing to re-engage on the basis of the higher value now being put forward.”

The SCA board will also be overhauled with the planned retirement of directors including Mr Murray and Glen Boreham this year — both have served on the board for more than nine years.

Mr Boreham will leave his board position on March 27.

SCA said Mr Murray had informed the board of his plan to retire as director no later than SCA’s annual general meeting, which is scheduled for October 30.

He will remain as chair until the proposed takeover has been resolved.

At SCA’s half-year results announced last month, 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.

ARN were contacted but did not comment. SCA shares rose 4.2 per cent to $1 per share on Monday while ARN added 3.2 per cent to 80c per share.