Southern Cross courts wider interest as board reviews ARN deal
Southern Cross Austereoexecutives are aiming to drum up wider interest to counter a takeover bid from radio rival ARN Media and private equity firm Anchorage Capital Partners lobbed last week.
Southern Cross shares leapt 20 per cent to 90¢ after ARN and Anchorage broke cover on a surprise offer to acquire the radio and TV network, divide up its assets between them, and create two new media entities.
Southern Cross Austereo CEO John Kelly.
Between a torrent of phone calls and questions from his investors, Southern Cross chief executive John Kelly, who only took the top job in July, has been looking to widen the field of bidders, a person with knowledge of the process said.
Flushing out other suitors would ignite a bidding war for Southern Cross if successful. He will face investors at Southern Cross’ annual general meeting on Friday. The company declined to comment.
Southern Cross investors, meanwhile, have been fielding calls for their stakes.
Simon Mawhinney, managing director of investment manager Allan Gray, which owns 16.4 per cent of Southern Cross, said he received an offer to buy a chunk of his holding. Not long before the takeover announcement, he had one party – whose identity he doesn’t know – offer to buy his entire stake.
On Wednesday, ARN and Anchorage, advised by Jefferies and Gilbert+Tobin, offered Southern Cross shareholders 0.753 ARN shares for each Southern Cross share, plus 29.6¢, and franking credits of 12.7¢ a share. That is worth 94¢ a share, based on the stock’s Tuesday closing level, according to Macquarie.
The offer had been in the works for four months, since ARN took a 14.8 per cent stake in Southern Cross, paying a 42 per cent premium at $1.08 a share.
If the takeover succeeds, ARN would
Read more on afr.com
