Southern Cross Media Group (SCM Group) has offered to buy Austereo Group in a deal valuing the radio group at $707 million.
The proposed transaction will be undertaken by a wholly owned subsidiary of SCM Group in an off-market takeover. The deal proposes to give Austereo shareholders the choice of receiving $2.05 per share, and an intended dividend of .05 per share, or an entitlement to 0.95 SCM Group shares per Austereo share, together with the .05 dividend.
In addition, SCM Group has committed to paying an additional .10 per Austereo share if the 90% compulsory acquisition threshold is reached.
Austereo directors will unanimously recommend sharesholders accept the offer in the absence of a superior proposal.
"This deal is consistent with our strategy to build a strong Australian media company," said SCM Group chairman Max Moore-Wilson.
"Our shareholders will benefit from the larger group, significant opportunities for cross-fertilisation and strong cash generation."
The sale of Austereo was exclusively revealed by AdNews last week, with the news that majority shareholder Village Roadshow intended to sell its 52.52% stake in the radio network.
According to SCM Group, the merger of the two companies will generate revenues in excess of $670 million, and enable national coverage through television and radio with "enhanced" digital services for regional audiences.
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