‘I don’t think it’s been fully appreciated by the market’: SCA CEO says network is undervalued in ARN takeover bid
ARN seems pretty confident its takeover of rival Southern Cross Austereo is likely to close this month, but as SCA boss John Kelly tells Mumbrella, the offer simply may not stack up.
A few weeks before Kelly took over as managing director and CEO of SCA last July, the company’s nearest competitor, ARN Media, took a 14.8% stake in the business he was tasked with steering through a period of advertising downturn and general market tumult.
UPDATE: SCA shareholders look to remove board and management
John Kelly is right. The ARN assets, other then Kyle and Jakie O, and Christian O’Connell, are just devoid of future value. Why would you trade SCA’s 5 cap city FM pairs for ARN’s 2 cap city FM pairs and 3 mixed FM/AM pairs. And then give away the future DAB frequency dominance that SCA has in DAB where it has between 52-55% of all DAB frequencies. Add to that 4.5m regional population coverage – over 2X that of ARN . And its regional that is the growing media and economic market. Why else did regional revenues increase by 6% in IHFY24
All this for 0.753 shares in the ARN combine SCA/ARN group.
And what about Kyle and Jackie O? . Kyle was born in 1971 and Jacki 1975. They are old and moving well away from the National media age of c37 years . He is 52 and she’s 49. . . You look at when Denton, Mulray or Hamer retired – all under 42 years of age. These are not long-standing assets like frequency ownership that SCA has .
Lastly if it were not for the most incompetent SCA board that has no, Zip, media experience other than one director who claims he ran PBL media NZ assets (like running Goat Island in Sydney Harbour). They have monumentally stuffed up the value of SCA, but maybe because of mistakes made during the Max Moore Wilton, Leon Pasternak and Rhys Holloran era before them. This is an opportunistic bid where two of the cards are two aging stars. Sunset Boulevard
There is an enormous list of capable media “people Centrix” board members in the media market. These sorts of people come to mind. Hugh Marks -ex NEC , even Grant Blackley back , Brendan Cook ex OML, Matthew Melhuish ex Enero, Beverley McGarvey (assuming TEN does a News Hub NZ and effectively shuts down linear TV ), Tim Worner – ex NEC, Greg Hywood – ex Fairfax, or Mike Connaghan ex WPP.
It’s not that hard.
If ARN are serious, they would start buying up shares – as Kelly suggests, it’s not cash, it’s part shares in a non-existent entity, so how can they recommend that?
Put the cash down, let everyone then choose & it will be over quickly