ARN SCA merger deal may be on the rocks

The proposed merger deal between ARN and SCA may be on the rocks.

Our sources report that an internal meeting at ARN late on Friday was a stop/go point for the deal to progress from the ARN side.

The end of the Australian financial year is a significant point in any merger for many reasons, including the ability for tax write offs for redundancy payments or other losses resulting from any deal, so the players on the ARN side, ARN Media and Anchorage Capital would be keen to know if the deal is going to happen so that financial strategies can be prepared before June 30. Timing in merger deals is everything, so if it is not right, Anchorage may not drop anchor in the ARN pond.

Meanwhile, at SCA, the bean counters have been studying the value of the deal in light of the current relative share prices of the two companies.

ARN’s share price finished the week at 84 cents per share while SCA finished at 94 cents per share. Because shares are a part of the deal, the relative share price of each company is one factor in considerations for shareholders.

Late on Friday, ARN made a routine ‘change in shareholder’ announcement to the ASX, as it is required to do when major holdings change hands.

Samuel Terry Asset Management Pty Ltd increased its shareholding from 5.3% voting power to 7.4% with the purchase of an additional 6.8 million shares at 83 cents per share. A change in shareholder dynamics can sometimes signal a change in board attitude.

If the deal does end up on the rocks, both publicly listed companies will be required by the stock exchange to report it to the market, so watch the investor notices of each company next week to see which course this deal takes next.

with ARN’s Annual General Meeting scheduled for this Tuesday, an announcement is imminent


Since we published this earlier today, more reports have come to hand. See

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