The board of Southern Cross Austereo (SCA) has finally responded to the takeover proposal from ARN and Anchorage Capital. (The two firms are referred to as The Consortium in ASX documentation making them sound like an invading force in a Star Wars saga.)
It’s been nearly five months since the proposal was first tabled. The message from the board today is the offer is not enough and it wants a revised proposal.
The words weren’t as blunt as that, but that was the communication.
In a release to the ASX this morning, the board responded to the complicated plan to acquire all the SCA radio and TV assets and break them up into three, or possibly more, separate businesses.
The original offer on October 18, 2023:
ARN and Anchorage Capital wanted to acquire 100% of SCA for 0.753 shares in a new company following re-allocation of SCA and ARN assets (ARN Newco) and 29.6 cents cash per share.
Under terms of the original offer from ARN and Anchorage, ownership of Triple M and the KIIS network would rest with a new-look ARN
In its first real commentary on the merits of a deal like this, the SCA board said:
The SCA Board acknowledges the strategic merit for shareholders of combining complementary and high-performing radio and digital assets of SCA and ARN in ARN Newco and reducing exposure to regional television on appropriate terms.
Last week Mediaweek published this story:
SCA break-up: CEO John Kelly explains why board not yet happy with offer
SCA board says ‘no’
After running a ruler over the financials of the prosed deal, the board said today:
Based on the information provided by the Consortium, the Board has concluded that the current terms of the Indicative Proposal undervalue SCA and, as a result, the Indicative Proposal is not in the best interests of SCA shareholders.
Improve the offer and it might have a chance
The board continued:
Despite the Board’s assessment of the current terms of the Indicative Proposal, SCA remains willing to consider any revised proposal that SCA assesses as being consistent with the Consortium’s original proposal and in the best interests of all shareholders.
SCA Chair Rob Murray said in an ASX release:
“Our board acknowledges the strategic merit underlying the consortium’s proposal but considers that the current terms of the proposal undervalue SCA. We are open to considering proposals from the consortium or other parties that would deliver fair value and be in the best interests of all our shareholders.
“In the meantime, we remain focused on continuing to optimise the audio ecosystem we have created across broadcast radio and digital audio. This is central to our strategy and our value proposition, and we are committed to converting our audience leading positions into sustainable growth and returns to our shareholders.”