Broadcaster ARN Media has highlighted an alternative which could put more cash on the table in its takeover of competitor SCA.
ARN, backed by private equity firm Anchorage Capital Partners, in October made a $330 million offer, made up of 0.753 of an ARN share and 29.6 cents cash for each SCA share.
The deal would create two new companies, one controlled by Anchorage and the other becoming a bigger listed entity.
Now ARN has highlighted the possibility of a pre-completion fully franked special dividend, expected to give an additional value of 12.7 cents per SCA share.
This option was raised as a possibility in the original proposal made in October and was highlighted today in an update on the bid.
SCA shares were 8% higher at $1.04 late afternoon. ARN was up more than 12% to 97 cents.
“The consortium remains open to working with SCA to structure part of the cash component,” says ARN in a statement to the ASX.
SCA has agreed to extend the time needed to complete due diligence.
“The consortium remains confident that the indicative proposal represents a compelling value proposition for both ARN and SCA shareholders,” says ARN.
SCA says its advisers have been in discussions with ARN and Anchorage.
“The parties have not reached a binding agreement to implement the indicative proposal and have not agreed to commence preparation or negotiation of any transaction documentation,” says SCA in a statement to the ASX.
“The indicative proposal is subject to several conditions, including satisfactory completion of due diligence currently under way, subsequent negotiation and execution of transaction documentation, and regulatory approvals.
“There is no certainty that a transaction will eventuate. SCA recommends shareholders take no action in relation.”
The takeover deal, already a complicated transaction, has been further muddied by a share transaction before the bid was announced.
The Takeovers Panel says ARN must vest 6.83% of the shares it acquired in SCA in corporate regulator ASIC so they can be sold.
Fund manager Allan Gray, from which ARN bought some SCA shares, must also sell within three months a further 0.08% of SCA shares.
The panel had ruled “unacceptable” how ARN acquired shares in SCA from Allan Gray.
ARN and Allan Gray say the contraventions of the rules were “inadvertent”.
ARN has asked for a review of the decision and the sale of the share order has been stayed until this can be considered by The Takeovers Panel.
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