If the Austereo deal goes to plan, Southern Cross Media CEO Rhys Holleran will have pulled off one of the biggest radio mergers in recent history. Is it “good for shareholders and for staff,” says Holleran, who talks to radioinfo about the deal this week.
What made you think of putting this bid together?
It’s not something you just think of, it is a good business proposition and we did a lot of work on it. Village approached us initially, and we would have been very silly not to consider it. When we looked at it carefully we decided a great way of growing would be to have a very good asset like this.
Will the cultures of Southern Cross and Austereo merge successfully?
People are people, but of course there are differences between regional and metro markets. We will be aware of the differences, so I think both companies will work very well together. Austereo is full of fantastic people and we already work closely in our Newcastle joint venture, so we know each other well already.
Five years ago we merged television and radio together and people asked the same questions then. We have succeeded and I think our track record speaks for itself.
This is a merger of great ideas. One plus one equals more than two in a situation like this.
Will this be a generational change for the radio industry. Will Peter Harvie want to move himself out of the business, leaving room for you to take charge?
Peter Harvie wants to be a part of this. His track record is exceptional, he is a gentleman and a man of his word and I am keen to work with him.
Do you expect regulatory hurdles from the ACCC or from ACMA?
There is nothing material to the deal. We have already put submissions to both bodies and they will talk with us about how we handle any issues.
Will you have to sell any stations because they overlap with existing licences?
We will do what the regulators require.
Will this be good for staff? How will it help their career paths?
To reflect on the future you have to look at the past. We have successfully integrated two companies already, the experience there is that if staff see this as an opportunity they can get ahead and enhance their careers. With a mixture of regional and metro stations staff will have the choice to move around and get ahead, or will still have the chance to be a star in a local market if that suits their circumstances better. There will be many possibilities.
Who’s going to lose their jobs because of this merger?
We look at opportunities, we will enhance jobs. A synergy isn’t necessarily about reducing everything, it’s about more than that. We will look for synergies to make the company better.
Southern Cross shareholders seem to have punished you by a falling share price since the deal was announced.
It’s a lot of information for shareholders to digest, so getting people to understand it will take some time. We are talking to shareholders to explain the deal and the benefits.
This isn’t a sprint, it’s a marathon. We are saying, this is the deal and these are the reasons. They are beginning to see why it is a good deal.
What about the extra debt you will have to carry for the acquisition?
Our debt profile is not excessive. Our leverage will be three times, that will still be a comfortable position. Currently our debt profile is two times, so it is not so much of an increase and still very comfortable.