Over 99% of Southern Cross Broadcasting share holders have voted to sell the company to Macquarie Media Group under the scheme of arrangement recommended by the Board of Directors.
Speaking at the meeting to approve the sale, Chairman John Dahlsen said:
On 3 July 2007, we announced a proposal for Macquarie Media Group to acquire all of
the shares in Southern Cross Broadcasting which it does not currently own by way of a
recommended scheme of arrangement, under which holders of fully paid shares in
Southern Cross Broadcasting would receive $17.41 per share, comprising a cash
payment of $17.05 per share and a Special Dividend of $0.36 per share…
Your Directors believe that the Macquarie Media Group proposal offers excellent value
to Southern Cross Broadcasting shareholders and unanimously recommend that you
vote in favour of the Scheme. Each member of the Board intends to vote the Southern
Cross Broadcasting shares over which he or she has voting control in favour of the
Scheme.
The Board’s primary reasons for recommending that you vote in favour of the proposal
are as follows:
* The Scheme Payment represents a significant premium over Southern Cross
Broadcasting’s historical share price performance before Macquarie Media Group
acquired its strategic stake in Southern Cross Broadcasting, and is a significant
premium to research analysts’ fundamental valuations at the time the transaction
was announced;
* The implied valuation multiple of 12.9x 2007 normalised EBITDA, or 13.6x – 13.8x
2007 normalised EBITDA when excluding the Southern Star business at the
valuation ascribed by the Independent Expert, is attractive having regard to
precedent transactions in the media space;
* Depending on your individual tax positions, shareholders are able to capture
incremental value from the franking credits attached to the 36 cent fully franked
Special Dividend; and
* Because the transaction consideration is 100% cash, you will receive certain and
immediate value for your shares.
Since the proposal was announced on 3 July 2007, the Board has not received any
other proposals for your shares and no new developments have come to our attention
that would change our view that the Macquarie Media Group offer is in the best
interests of Southern Cross Broadcasting shareholders.
The company will now de-list from the stock exchange and proceed with the sale of its assets. Macquarie Media Group will also now move to on-sell the capital city talk stations to Fairfax.
Macquarie Media group has welcomed the news. Managing Director Alex Harvie says the positive vote is “recognition of the fact that the proposal delivers value for shareholders.”
“MMG is excited about increasing its commitment to regional Australia and continuing to provide outstanding local news, entertainment and information to Australians who live outside the capital cities.”
A final court hearing and compliance paperwork can now proceed, with finalisation of the deal expected on November 5.