Nine launches takeover bid for 2GB and 3AW owner Macquarie Media
Nine has launched a bid to become the full owner of radio broadcaster Macquarie Media, posting a takeover offer to the Australian Stock Exchange this morning. Macquarie Media owns Sydney and Melbourne’s most listened to radio stations 2GB and 3AW.
The board of Macquarie Media has recommended acceptance of the $1.46 per share offer. Macquarie Media’s current share price is $1.74. The deal gives Macquarie Media an enterprise value of $275m.
Following its merger with Fairfax in December 2018, Nine became the majority shareholder in Macquarie Media, holding a 54.5% share, while former adman John Singleton owns 32.4% and investor Mark Carnegie 3.6%.
“The acquisition of Macquarie Media consolidates Nine’s position as the leading provider of news and current affairs content across all of the key platforms – television, digital, print and now radio,” said Hugh Marks, CEO of Nine.
“We are big believers in the power of Macquarie’s talk radio network and in its people. A team who together drive debate and speak up so often for so many Australians. We look forward to the future growth of the business with the full backing of Nine and to ensuring that the Macquarie Radio team have the support, infrastructure and clarity to be able to do what they do best.
“Together across our businesses we will be investing more than $400 million per year in providing Australians with premium news and editorial content. Entrenching Nine as the go-to place for all news needs for all Australians, across all platforms.”
Alongside 2GB and 3AW, Macquarie Media also owns 4BC, 6PR and Macquarie Sports Radio.
The offer values Macquarie Media at $275.4m and will see Nine part with $113.9m for the remaining 45.5% share in the business. That figure is inclusive of Macquarie’s $22m debt.
According to Nine, the acquisition will be financed from cash reserves and existing debt facilities. Should it be accepted by Macquarie Media shareholders, the transaction will be completed by December 2019.
A letter from Macquarie Media’s independent directors, which was also posted to the ASX, said they unanimously accept the offer, in the absence of a ‘superior proposal’ and subject to an independent expert review.
Macquarie Media chairman Russell Tate said himself, and directors Monique Anderson and Louise McCann, had carefully considered the terms and conditions after being presented with the indication of interest on Friday August 9, and unanimously recommended to shareholders that it be accepted.
Last week, Macquarie Media announced that its revenues had fallen to $132m for the year.
So the independent directors are recommending an offer at $1.46 per share, when the shares were last traded at $1.74? Not a lot of shares are being traded in this company, but the share price has been above $1.70 for most of the last few months.
Would this really be the exit price that John Singelton was looking for? And would an uber-investor like Mark Carnegie be excited at that (though he will follow SIngo’s lead on this one)? On the other hand (and this would be Nine’s upper hand….), who else is going to buy their stakes and become a significant minority shareholder in Maquarie Media?
If Singo and Carnegie accepts, then that will push Nine to above 90%, which means they can force the smaller shareholders to sell at this reduced price as well.
I wonder if the board at Macquarie Media, who may have a more than an inkling that Singo and Carnegie will sell at this price, has decided not to make an issue of the fact that their acceptance will also drag the smaller shareholders into a forced sale at 16% discount instead of what is usually the case, a premium. Good governance by the “independent” board committee…. ?!
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The past 3 to 6 months have been an absolute mess within that company. How long do you think it will take for the Nine board to run a broom through the management of Macquarie Media?
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Many people turned off nines morning show because the lack of commonsense and bias in the show was really getting unlistenable and unwatchable.
Karl, Lisa (and her husband) the 2 blond women really made us angry the way they treated their invited guests And their high and mighty attitudes and views which really weren’t a level playing field so we listened to 2GB instead with it’s commonsense, great guests and sensible reporting on topics in getting to the point but now we are turning off more and more especially when we have the secondhand today shows commentators taking the places of what were interesting and appealing to the majority.
I don’t think the majority of Australians will faithfully listen to 2GB if the chemistry is changed. The lineup of Alan Jones, Ray Hadley, Chris Smith and Ben Fordham (fortunately Chris Smith is now on Sky) these guys are great to listen to. 2GB is unique as it is and without the flood of Nines hand-me-downs who many people switched off previously.
Lets hope the new owners recognise 2GB as it is remains very popular in deed.
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Do you reckon that Nine might use the Sydney licence for 954 AM to broadcast something that is remotely relevant to Sydney again?
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Probably a couple of weeks.
We had an managerial directive to not purchase any more brooms at the start of last financial year, so we actually don’t have any at the moment. The cupboard is literally bare.
I’ll put in a requistion for a new Sabco this arvo. Fingers crossed.
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Last traded price meaningless for MRN – almost zero liquidity given Nine, Singo and Carnegie have >90%. Standard control premium only a relevant concept when stock is continuously traded.
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Sure, but despite that, the shares are traded and have traded many times in the last 12 months and never has it dropped below $1.55 (vs the offer today at $1.46). Nine has Singo and Carnegie over a barrel and the board, led by the “independent” Russell Tate (a well-known, long-time mate of Singo and Carnegie) is recommending to take the offer…. And of course no mention whether Singo has accepted or even been contacted… 🙂
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NINW HAs aLREADT \Y HAD SOME INFLUENCE ON MACQYARYE SPORTS RDAIO MORE SPORTS TALENT TO JOIN MSR I RGEIY\UGGHOUT THW NWRQIOEJ\K. MACQUARUE PSORTS RADIO IS HERE RI STAY IT IWLL NOT GO ANYWHERE ANYTIME SOON
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Well said, Jason.
TIM THANKS FIR THE COMLIMENT
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