ARN Media, with talks on a proposed acquisition of competitor SCA taking longer than many expected, says the deal is compelling for shareholders of both companies.
ARN says the proposal has a significant value creation opportunity in bringing together ARN and SCA radio and digital audio assets
"We are under NDA, so I'm limited in what I can say on that but I will reconfirm that that we see it as a very strong value creating, compelling proposition for both SCA and ARN shareholders," CEO Ciaran Davis told AdNews after releasing ARN results for the full year to December.
Details about the negotiations, and the due diligence process, are being kept under wraps. However, insiders say the length of talks indicates that SCA is taking the proposal very seriously.
ARN acquired a 14.8% stake in SCA in June 2023, saying it represented "attractive value" for its shareholders.
In October, ARN formed a consortium with private equity firm Anchorage Capital Partners to make bid to acquire SCA through a scheme of arrangement.
The offer, valuing SCA at $330 million, is made up of 0.753 of an ARN share and 29.6 cents cash for each SCA share.
ARN would get a metro radio network of 10 stations across Sydney, Melbourne, Brisbane, Adelaide, Perth; and a regional radio company of 88 stations. Anchorage gets the Hit and Pure Gold brands, 35 regional stations and the regional TV network. Digital assets would become a joint venture.
“Anchorage Capital Partners (ACP) has reaffirmed its commitment to the consortium with ARN Media to acquire a strong, independent portfolio of media assets across metro and regional radio, regional TV, and an equal interest in the to be formed digital audio joint venture audio platform," a spokesperson for Anchorage Capital Partners said today.
“ACP has been actively participating in the due diligence process, believes the transaction remains compelling and would deliver the foundation of a private, independent and well-capitalised national media company owned by ACP.”
ARN used its results announcement to reiterate how keen it is to proceed with the deal.
"We are continuing to progress the Indicative Proposal with the SCA board," said ARN Media chairman Hamish McLennan.
He said the deal would deliver a compelling regional network for advertisers and communities.
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