‘The pressure’s on to do the deal more quickly’: What Seven West Media’s stake in ARN means for SCA takeover
Seven West Media (SWM) becoming ARN’s largest shareholder this week may have a bigger impact then first thought.
On Monday, the media company confirmed it had acquired a 19.9% share in ARN amidst the network’s takeover bid of rivals, Southern Cross Austereo. However, despite this, SWM said it had “no intention” of launching a takeover bid of ARN or SCA and is only interested in ARN’s “continued and long-term success”.
On a new episode of the Mumbrellacast, Mumbrella publisher – and former national director of operations and general manager of 2DayFM and Triple M Sydney – Adam Lang, said SWM’s stake in the ARN/SCA media wars could have a huge impact on the takeover proposal.
“I think the pressure’s on to do the deal more quickly,” Lang said.
“So, Seven West Media have said, ‘we want to back our ARN’s plan’… coming in and backing ARN and not SCA means ARN’s desire to close this deal by December probably has greater likelihood now than it did before the weekend.”
SWM’s move comes after SCA held an annual general meeting in late October, where SCA chair Rob Murray said he was not confident about the December timeline to get the deal done, calling it “highly optimistic”.
Lang continued: “If they can wrap this up by 31 December… that means that all of the issues they’re dealing with now from cost of living pressure for consumers, advertising pressure from their advertising customers, can all be wrapped up within a transaction by 31 December.
“I think what [SWM’s stake in ARN] does is, it strengthens ARN’s bid, and it increases the likelihood that this might get traction to close before the end.”
In a statement given to Mumbrella earlier this week, ARN said: “ARN welcomes a new shareholder who is supportive of our business and the bid we have in place for SCA.
“We remain focused on the bid and delivering value for our shareholders.”
Meanwhile on Thursday, SCA announced that it had knocked back Australian Community Media’s merger proposal, saying it “would not be in the best interest of SCA and its shareholders”.
The network said one of the main reasons it rejected the bid was because ACM’s proposal included the acquisition of SCA’s regional print and digital assets which is “not consistent with SCA’s strategy”.
Listen to the full Mumbrellacast here.
