ARN continues takeover drive; SCA pumps the brakes: ‘There is no certainty that a transaction will eventuate’
A market update from ARN on its proposed takeover of SCA, and a follow up announcement from Southern Cross, have dashed hopes the deal would be agreed upon before the end of the calendar year.
Australia Radio Network made the offer to acquire 100% of Southern Cross Media Group in mid-October, with hopes of getting the deal across the line by the end of 2023.
An ASX update from ARN pours water on this, with SCA and its advisers granted “a further period of due diligence engagement to access the required information to progress its confirmatory due diligence.”
As such:
“The Consortium is also focused on progressing related transaction documentation in an efficient manner and, subject to the receipt of the required due diligence information, has an objective of delivering a certain proposal to SCA shareholders in early 2024. The Consortium remains confident that the Indicative Proposal represents a compelling value proposition for both ARN and SCA shareholders. This announcement should be read in conjunction with the Indicative Proposal.”
Under the Indicative Proposal, SCA shareholders would receive 0.753 ARN shares, plus 29.6 cents cash per SCA share.
SCA chair Rob Murray was doubtful of any agreement closing before the end of the year, telling shareholders in its October AGM that such a timeline was “highly optimistic”, adding, “frankly, we’re not going to be rushed.”
SCA released an ASX update just over an hour after ARN’s posting, which makes clear the deal isn’t as far down the road as the ARN announcement would suggest.
“The parties have not reached a binding agreement to implement the Indicative Proposal and have not agreed to commence preparation or negotiation of any transaction documentation.
“The Indicative Proposal is subject to several conditions, including satisfactory completion of due diligence currently under way, subsequent negotiation and execution of transaction documentation, and regulatory approvals.
“There is no certainty that a transaction will eventuate.”
Seven West Media last month acquired a 19.9% stake in ARN, making it the largest single shareholder in the radio network.
A week later, ARN announced they had signed Kyle and Jackie O to a historic ten-year, $200 million dollar deal.
Mumbrella has contacted SCA for comment.
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