Fairfax, Macquarie set sights on Southern Cross Broadcasting

THE Fairfax Media group and Macquarie Bank offshoot Macquarie Media are understood to be preparing a bid for Southern Cross Broadcasting, sources close to the deal have revealed.

THE Fairfax Media group and Macquarie Bank offshoot Macquarie Media are understood to be preparing a bid for Southern Cross Broadcasting, sources close to the deal have revealed.

Under the terms of the mooted deal, hammered out over the past two weeks, Fairfax looks set to take Southern Cross's metropolitan radio assets, including Sydney's 2UE, Melbourne's 3AW,  Brisbane's 4BC and Perth's 6PR as well as production house Southern Star.

Fairfax is also believed to be interested in acquiring the group's Satellite Music Australia operation which provides subscription music services, including 30 channels of music to Foxtel and Austar for their digital pay television services.

Macquarie is understood to be interested in taking over Southern Cross's regional TV stations which comprise the regional affiliates of the Ten network. These assets are more attractive to Macquarie following the acquisition of Adelaide's Channel 9 by WIN in May for $105 million, which was not seen as a comfortable fit with the regional stations.

Macquarie has long been examining a bid for Southern Cross, but the Fairfax Media involvement in a possible tilt is considered to be a more recent development.

Southern Cross shares are currently in a trading halt pending an announcement to the market on or before Wednesday.

The shares last traded 44c higher at $16.44 a share - a price which values the company at $1.19 billion.

Macquarie Media Group and its regional radio operating business, Macquarie Regional Radioworks, already own more than 15 per cent of SCB.

Southern Cross shares were volatile in trading last week following the announcement by 2UE radio personality John Laws that he would retire from broadcasting in November this year. 

The company reported a net profit of $31.6 million for the half year to December 31, up 9.6 percent on the corresponding half, on flat total revenue of $287.4 million.