Anchorage targets Australia's Southern Cross Media

Their proposal would see shareholders receive 0.753 in ARN shares and AUD 0.296 in cash for every Southern Cross Share. This implies a total value of AUD 0.94 per share before taking into account the benefit of any franking credits distributed in connection with the deal, according to a filing.

The price represents a 29% premium to Southern Cross’ October 17 closing price. As of early afternoon trading on October 18, the stock was at AUD 0.86, up 17.1% for the day, which gave the company a market capitalisation of approximately AUD 204m.

Anchorage would fully fund the cash consideration offered to Southern Cross shareholders, drawing on capital from its fourth fund, which launched in September 2022 with a target of AUD 500m. The “recently raised” fund has undrawn and available commitments of more than AUD 300m, the filing said.

Southern Cross claims to be one of Australia’s leading media companies reaching over 95% of the population through its radio, television, and digital assets. These include 99 radio stations under the Triple M and Hit network brands and 93 free-to-air TV signals. It is the sales rep for 34 regional radio stations, for Ten Network and Seven Network in certain markets, and for the audio platform SoundCloud.

The proposal envisages structuring Southern Cross and ARN’s radio and television assets as independent entities. This will lead to the creation of a focused metro radio network of 10 stations anchored by the KIIS and Triple M brands and a regional radio footprint of 88 stations – up from 47 at present – including ARN’s two existing stations in Canberra.

ARN’s management team would be responsible for delivering cost and other efficiencies arising from the combination.

Southern Cross generated AUD 505.6m in revenue for the 12 months ended June 2023, down 3.7% year-on-year. EBITDA fell 12.2% to AUD 77.2m, while net profit dropped 20.1% to AUD 21.9m. It had a total digital audio network audience of 10m across its radio stations, a television reach of 3.36m people, and 4.48m monthly unique podcast listeners.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Australasia
• Buyouts
• Media
• Australia
• Anchorage Capital Partners