Private equity firm Anchorage Capital makes move for Australia’s Southern Cross
Private equity investor Anchorage Capital has launched a surprise takeover bid for Australian media company Southern Cross Media, which owns a number of national commercial radio stations and the regional television assets of free-to-air broadcasters. Private equity investor Anchorage Capital has made a surprise takeover bid for Australian media company Southern Cross Media (SCM), which owns a number of national commercial radio stations and the regional television assets of free-to-air broadcasters. The A$225m (US$140m) offer for SCM, which is the parent company of Southern Cross Austereo (SCA), would include 96 television signals and 99 radio stations. If approved by regulators and shareholders, the deal could shake up the Australian media landscape, offering restructured ownership and operational opportunities. SCA’s TV advertising reach extends to all of Australia, in conjunction with its affiliations with metropolitan commercial networks. The proposed deal would separate the radio and TV assets of ARN Media from SCA into independent ownership, subject to regulatory approvals.
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Private equity investor Anchorage Capital has launched a surprise takeover bid for Australian media company Southern Cross Media (SCM), which owns a number of national commercial radio stations and the regional television assets of free-to-air broadcasters.
The bid is backed by radio rival ARN Media and if the complicated deal is approved by regulators and shareholders it could shake up the Australian media landscape, offering restructured ownership and operational opportunities and a new level of competition.
The A$225m (US$140m) offer for SCM, which is the parent company of Southern Cross Austereo (SCA), led by CEO John Kelly, would include 96 television signals and 99 radio stations. It also provides national sales representation for 56 additional radio stations and 39 TV stations.
Under the proposed deal, the radio and TV assets of ARN and SCA would be separated into independent ownership, subject to regulatory approvals. The deal would result in two distinct media organisations that would compete independently across the country.
SCA’s TV advertising reach extends to all of Australia, in conjunction with its affiliations with metropolitan commercial networks. Additionally, SCA has a multi-year FTA programme supply agreement with Sky News Australia to broadcast Sky News content across its largest regional markets on a dedicated 24-hour news channel.
SCA said in a statement: “The proposal is unsolicited, complex and highly conditional. SCA recommends shareholders take no action in relation to the indicative proposal from ARN and ACP. The indicative proposal is subject to the unanimous recommendation of the SCA board, due diligence, shareholder and regulatory approvals from both the ACCC [Australian Competition and Consumer Commission] and ACMA [Australian Communications and Media Authority], and other terms and conditions. SCA will update shareholders as required.”
Anchorage Capital has little media asset experience as its major investment in Australian and New Zealand is national retailer David Jones. ARN owns significant commercial radio stations and digital radio assets but has no TV investments.
Aside from the regulatory hurdles, the bid faces a conflict-of-interest challenge in that News Corp Australia owns 13.2% of ARN as its second-largest shareholder and Lachlan Murdoch, News Corp’s chair, controls rival Nova Entertainment network in Australia.
Konular: Private Equity, Australia, Alaska, Anchorage