Nick Bolton attempts to thwart Southern Cross takeover
Activist investor Nick Bolton will attempt to thwart a tie-up between radio giants Southern Cross Austereo and ARN over claims the latter inadvertently breached the Corporations Act when it bought a stake in its rival.
ARN, which owns the KIIS and Pure Gold radio networks, and private equity firm Anchorage Capital Partners, announced a surprise offer to acquire the radio and TV network last week.
KIIS’s star radio hosts Kyle and Jackie O.
The deal would involve carving up the two media companies’ assets, creating two new media entities.
But the proposed takeover has already hit a major roadblock. On Wednesday, Southern Cross released correspondence from Takeovers Panel chief executive, Allan Bulman, documenting that Keybridge Capital – which is run by Mr Bolton – argued ARN’s initial purchase of Southern Cross shares was done in breach of the Corporations Act.
The concerns are to do with shares held by fund manager Allan Gray at the time ARN made its first play for Southern Cross in June.
Mr Bolton argued Allan Gray had a controlling interest in ARN at the time because ARN’s share buyback pushed Allan Gray’s voting power past 20 per cent.
Mr Bolton submits that the stake held by ARN, some of which was purchased from Allan Gray, does not comply with the Corporations Act.
“The applicant submits that 16,368,919 Southern Cross shares were acquired by ARN in contravention of section 606 [of the Corporations Act],” Mr Bulman noted in the letter.
If Keybridge Capital is right and there was an inadvertent breach, the panel would confiscate the relevant portion of shares and release them to the market. Mr Bolton wants ARN and its associates prohibited from buying any new Southern Cross shares for six months after the 16 million
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