Anchors away. Where to now for ARN’s takeover bid?


“It feels like it’s not over yet.”

Industry experts who’ve been following the whole saga from the get-go believe ARN Media’s proposed takeover of SCA is far from being dead in the water.

Speaking on the latest ep of the Game Changers Radio: Melbourne Radio Wars podcast, award winning media analyst Tim Burrowes from  Unmade says “I’m certain that ARN’s ambitions remain.”

His comments followed the week that was … or in ARN’s case, that week that wasn’t.

On Wednesday, SCA announced that it had knocked back ARN’s revised takeover bid.

Under the new proposal, ARN would have acquired the same radio assets as before, plus assume 100% ownership of the combined digital audio assets of ARN and SCA.

In an ASX statement confirming it would not be going ahead with the revised offer, SCA said doing so would have involved significant costs to break up its highly networked and integrated audio platform.

The SCA knockback was a double whammy for ARN, already scrambling from the fallout of Anchorage Capital Partners’ decision to pull out of the negotiations.

Burrowes says in the days leading up to the Anchorage bombshell – which came to light on Mother’s Day – it was clear that the ‘mood music’ was beginning to change.

“By the Saturday there was this sense that perhaps things were not going as planned,” he says.

“What it looks like, and certainly the way that ARN are presenting it, is that what was really spooking Anchorage was the TV side of the business.”

All this, against the backdrop of a tough advertising market.

“In the end, it looks like there was some kind of final straw that made it easier for Anchorage to walk away, rather than go through with it,” says Burrowes.

While in an interview with The Australian, ARN Media chairman Hamish McLennan says the media company has received “strong interest” from potential partners in a fresh takeover bid for SCA.

McLennan says the company had “better managers of their assets” and is still optimistic of putting another offer on the table.

Burrowes suspects there is more yet to play out.

“Let’s not forget that ARN still owns almost 15% of SCA. I understand they have no plans to sell that stake.”

And, with a bit of breathing space now for the parties involved, there’s even been the suggestion that SCA might well become the aggressor.

However it transpires, the impact on staff – at either organisation – remains to be seen.

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No chance
20 May 2024 - 11:34 am

lol. The deals are just getting worse and worse. ARN just want to justify to their staff why they spent $15m on this shambolic exercise and why so many people will continue to lose their jobs. Give up guys!

20 May 2024 - 1:01 pm

Their desperation has turned into deluded proposals, simply because their company cannot sustain the enormous salary of KJ with only owning one network.
They have not made financially sound contractual decisions for their shareholders, and now panicking.

20 May 2024 - 3:33 pm

This is a complete disaster by ARN.

ARN – or anyone else for that matter – can acquire SCA tomorrow by doing it the proper way and buying a majority of shares at market value. At today’s SCA share price of $0.85 they could buy control of SCA for just a little over $100M. They could even partner with Seven West (who themselves own around 20% of ARN) to share the cost and risk.

But instead they tried to execute a weird deal where SCA shareholders have their shares morph in to a proportion of ARN shares that weren’t worth much more than the SCA shares to begin with. Then there’s the millions of dollars of restructure costs and bureaucracy needed to execute the deal. And at the end of it all, the SCA shareholders end up with a network that looks a lot like the one they already own.

The best way forward is for ARN just to buy the shares – then the existing shareholders get cash. Perhaps this is still being considered. It’s interesting to note that Anthony Catalano’s media group has been purchasing SCA shares in tranches all year, and now has 10% ownership of SCA.

    25 May 2024 - 10:17 am

    The current media ownership laws would prevent a straight takeover as you suggest, but thanks for your thoughts on the issue. It’s a big talking point in the radio industry, we appreciate your input.


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