The Australian Financial Review (subscription required) has reported that Anchorage Capital Partners has pulled out of their joint acquisition attempt with the Australian Radio Network (ARN) to takeover Southern Cross Austereo (SCA) scuppering the bid, at least for now.

Last Thursday Radioinfo was informed by sources that an All Staff meeting had been called at ARN HQ for that afternoon or for the following day (Friday) apparently to inform staff that the deal had been finalised and what they should expect from it. The meeting never took place.

Instead, a crisis meeting was held early this morning (Sunday May 12) in an attempt to salvage the proposal.

The proposal centered around a plan to takeover SCA and then redistribute their existing station networks between ARN and Anchorage so that ARN would not fall foul of the two stations per market rule but would give them the two stations in each major market that they don’t have now but SCA does.

In the asset swap ARN would have kept KIIS and taken over Triple M along with 88 of the regional stations owned by SCA. Anchorage would own the Pure Gold and Hit brands, as well as 35 regional stations and the regional TV network. They would co-own a separate digital streaming business, presumably, merging LiSTNR with iHeart.

Sources close to the deal say that there’s been some substantial changes to the assets involved just in the past week. WIN Corporation and Seven West Media announced a joint venture in north-western Victoria, Mildura Digital Television, would close down, ending Network 10’s free-to-air signal in a large chunk of the coverage area. That company’s television sales has been represented by Southern Cross, and was one of the assets involved in the deal.

A timeline of events so far:

19 June 2023: ARN Media Limited (ARN) spends $38.3 million in an after-market raid to acquire a 14.8% interest in Southern Cross Media Group Limited (SCA).

21 June 2023: Allan Gray, a fund manager and shareholder in ARN and SCA, reportedly reduces its relevant interest and voting power in SCA from 21.95% to 16.44%.

18 October 2023:  ARN and Anchorage Capital Partners Pty Limited (ACP) make a non-binding indicative offer to SCA to acquire 100% of the fully diluted share capital.

10 November 2023: Antony Catalano, the chair of Australian Community Media (ACM), and his business partner Alex Waislitz propose a merger with SCA to attempt to thwart ARN and ACP’s ambitions of acquiring it.

13 November 2023: Seven West Media Limited (SWM) acquires 14.9% interest in ARN, making it now a party of five in takeover proceedings. SWM also does a cash-settled equity swap with Barrenjoey Markets Pty Limited which gives them a further 5.0% in ARN and makes them the largest shareholder.

23 November 2023: The Australian Government Takeovers Panel makes a declaration of unacceptable circumstances around the ARN and ACP June acquisition of the 14.8% of SCA shares.

22 December 2023: After an appeal and update from ARN the Australian Government review panel reaffirm their initial decision of unacceptable circumstances.

18 January 2024: The Australian Government Takeovers Panel changes its decision about the unacceptable circumstances. leaving ARN able move forward.

7 March 2024: The SCA Board decides that the Indicative Proposal from ARN and Anchorage is “not in the best interests of SCA shareholders” but remain open to consider a revised offer.

15 March 2024: ARN and Anchorage up their offer to 0.870 ARN shares for every SCA share and 29.6c cash paid by bidding partner Anchorage Capital Partners. This would be worth more than $200 million additional to SCA.

18 March 2024: Glen Boreham announces he will retire from the SCA Board on March 27. Rob Murray also decides to retire as Director and Chair. Heith Mackay-Cruise succeeds Murray as Chair. The Board chooses not appoint any new directors until after the end of financial year.

I find it hard to believe that this could be the end of this. Could another company engage with ARN to create a different consortium? Might SCA mount their own raid?

More details as they come to hand.