SCA chair blasts Anchorage and ARN after ‘frustrating’ takeover bid withdrawal

Anchorage Capital has pulled out of the takeover bid for Southern Cross Austereo, which would have seen ARN and the investment group acquire 100% of the media company.

According to an ASX update made this morning, Anchorage “notified ARN of its withdrawal from the Consortium”, after due diligence with Southern Cross.

“In light of a continued decline in the trading performance of Regional TV since the Consortium Proposal was made in October 2023, the further deteriorating outlook for Regional TV, and the existing long-term contractual obligation of SCA for outsourced TV broadcast transmission, it does not support ACP’s Regional TV investment thesis,” ARN’s update reads.

“As a result, the Consortium must withdraw the Consortium Proposal. ARN thanks ACP for its constructive engagement as a Consortium partner and recognises the considerable investment of time and resources that ACP has made over the last seven months.”

ARN says, in light of Anchorage’s decision to collapse the consortium, it “intends to engage with SCA on a revised non-binding indicative proposal.”

Under a new proposal, ARN would acquire the same radio assets as before, plus assume 100% ownership of the combined digital audio assets of ARN and SCA. SCA shareholders would receive up to 0.870 ARN ordinary shares for each fully diluted SCA share, plus would retain their shareholding in SCA, or receive their equivalent shareholding in a newly listed demerged entity that would hold the radio and television assets previously expected to be acquired by ACP under the Consortium Proposal.

The ‘New SCA’ would own a national network of 44 radio stations, comprised of five HIT and three Gold-branded metro stations and 36 regional radio stations.

ARN said, under the new proposal, SCA will remain a listed company, with an independent board and management – but it is supportive of working with SCA to “explore any alternative proposals it may receive”.

ARN Media chairman, Hamish McLennan said: “The requirement to withdraw the Consortium Proposal should not deflect from the significant achievements ARN has delivered this year in a challenging market.

“We grew total revenue to the end of April, have accelerated our digital audio revenues, regional markets continue to perform strongly, and we are on track to deliver the permanent cost-out reduction target we set ourselves for 2024.

“I firmly believe ARN is the most well-run audio business in Australia, and we are in a position of strength to progress the ARN Indicative Proposal for the benefit of both ARN and SCA shareholders.

“It would deliver a business of the scale necessary to compete against global platforms. Market restructuring has been talked about for a long time, but the fact remains that today’s regulatory environment is not reflective of the market in which Australian media operates and urgently needs government action”.


In its own statement issued on Monday morning, SCA said it is “disappointed that the Consortium has now withdrawn its proposal”.

“Over the past seven months, SCA’s management team and advisers have worked diligently and collaboratively with the Consortium to evaluate the Consortium’s proposal and to enable the Consortium to substantially complete its due diligence,” SCA chair, Heith Mackay-Cruise, said.

“This has required considerable cost and management effort by SCA. It is frustrating that the Consortium has now withdrawn its proposal in circumstances where any potential material concerns should have been identified much earlier in the process.

“I wish to acknowledge that the SCA management team has supported the due diligence process without losing focus on daily business activities. Broadcast advertising markets continue to be challenging, but SCA has grown its share of metro radio and digital audio markets during this year. In addition, our LiSTNR digital audio ecosystem delivered positive EBITDA for the first time in April and is on target to do so for the June quarter.

“We remain open to considering proposals that would deliver fair value and be in the best interests of all SCA shareholders.”

Mumbrella has reached out to ARN and SCA for further comment.


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