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Australian Community Media and ARN plan Southern Cross Austereo takeover

Australian Community Media (ACM) chairman Antony Catalano is in talks with ARN Media for a joint bid to take over Southern Cross Austereo (SCA).

One of Australia’s leading media companies, SCA owns 99 stations across Triple M and The Hit Network. The network reaches over 95% of the Australian population through its radio, television, and digital assets.

ARN Media’s portfolio of brands includes KIIS, Pure Gold, CADA, and iHeartRadio, while ACM owns a myriad of regional newspapers and speciality publications, including The Illawarra Mercury, The Newcastle Herald, The Senior and The Land.

Catalano, who owns ACM alongside his billionaire business partner Alex Waislitz, met with ARN executives on Monday, according to the Financial Review.

Over the past six months, the pair have gradually acquired a 14.4% stake in SCA.

Last year, ARN Media, in partnership with Anchorage Capital Partners, launched a takeover bid for Southern Cross, offering a mix of shares, cash, and franking credits.

The deal aimed to merge the Triple M and KIIS radio brands, creating a large regional radio presence. ARN Media would take the assets it wanted, while ACM would take the remaining assets.

However, the bid fell apart due to lower-than-expected advertising revenue from SCA’s regional TV stations and costly long-term contracts.

In Australia, media ownership laws prohibit ACM from acquiring rival media outlets if it would reduce the number of independent voices in a regional area to fewer than four.

ARN Media and SCA have seen significant drops in value this year, affected by a declining advertising market and investors moving away from traditional media. ARN Media’s value has fallen by 33% to 67¢, while Southern Cross has dropped 32% to 66¢.

Catalano attempted to sell ACM to SCA in exchange for a larger stake – an offer rejected by the radio company’s board.

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