Macquarie Media recommends shareholders accept Nine takeover bid

Macquarie Media has posted a Target’s Statement to the ASX recommending its shareholders accept the $1.46 per share off-market takeover bid made by Nine.

Nine currently holds a 54.5% majority share in the radio business, gained after the merger with Fairfax in December 2018, while former adman John Singleton owns 32.4% and investor Mark Carnegie 3.6%. The takeover bid puts Macquarie Media at an enterprise value of $275m.

Macquarie Media’s independent directors recommend its shareholders accept Nine’s off-market takeover bid

Macquarie Media owns Sydney and Melbourne’s most listened to radio stations 2GB and 3AW.

Nine posted a bidder’s statement to the Australian Stock Exchange on August 30, followed today by a notice of dispatch of bidder’s statement to Macquarie shareholders. In accordance with takeover provisions in Australia, this must be followed by a target’s statement within 15 days.

The activity follows a bid from Macquarie Media this morning to change the narrative on the radio business’ fortunes following an advertiser exodus over 2GB breakfast host Alan Jones’ comments about New Zealand Prime Minister Jacinda Ardern.

In a letter sent from Macquarie Media chairman Russell Tate to 2GB’s advertisers, the broadcasting boss said there would be a full review of the Alan Jones Breakfast Show and offering client meetings with management and Jones himself.

In today’s Target’s Statement, the Independent Directors of Macquarie Media “unanimously recommended” that, in the absence of a superior proposal the takeover bid be accepted by the shareholders. Jones, who holds a 1% stake, Carnegie and Singleton have all spoken out about their support of the bid already.

As of 3:51pm, Macquarie Media shares had fallen below the $1.46 takeover bid, sitting at $1.44. At the initial time of the bid they sat at $1.74. According to the Target’s Statement, an independent review conducted by Pricewaterhouse Coopers Securities Limited valued each share at between $1.44 and $1.66.

Among the other reasons suggested for accepting the takeover bid, the statement notes that there is no guarantee a future bid will eventuate and that the offer implies an earnings before interest, tax, depreciation and amortisation for the enterprise value of 10.2x. Shareholders can opt to accept the offer, sell their shares on-market or reject the offer.

Both a loss of talent and a loss of key advertisers are listed as risks for remaining a Macquarie Media shareholder and rejecting the offer, with the ASX statement reading: “MRN [Macquarie Radio Network] could lose key advertisers due to a range of events, including as a result of failure to renew a contract, weakening of customer relationships or disputers with advertisers, failure to remember a contractual breach, comments or opinions experience by key talent, consolidation of advertisers, insolvency of advertisers or increased competition.”

The offer is subject to a minimum 90% acceptance condition and the bid from Nine is due to close at 7pm on October 14.


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