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Regional newspaper group Australian Community Media is still keen for a deal with Southern Cross Media Group (ASX: SXL) that could see it shed some of its major newspaper titles after the Triple M radio network owner rejected a merger proposal late last year.
Southern Cross says that rather than proposing another merger, this time ACM is looking to sell a portfolio of 14 of its daily print and digital news publications, as well as select regional-metro titles and its agricultural division.
ACM, which is owned by media moguls Antony Catalano and Alex Waislitz and was once part of the Fairfax Media group prior to its merger with Nine Entertainment in 2019, owns 92 publications including The Canberra Times, Newcastle Herald and Illawarra Herald, as well as niche agricultural banners The Land and Queensland Country Life.
While Southern Cross rejected the original merger proposal by ACM in November last year, arguing that regional print and digital assets were not consistent with Southern Cross’ strategy, the company today says the current proposal is “materially different”.
“The SCA board has decided to investigate ACM’s revised proposal to determine whether it would align with SCA’s strategy and have the potential to create value for and be in the best interests of SCA shareholders, particularly in relation to prospective value in ACM’s digital capabilities and content, regional focus, and other potential synergies,” says Southern Cross in an announcement to the ASX.
“Discussions between SCA and ACM are preliminary and there is no certainty that a transaction will eventuate.”
Southern Cross, which owns the Triple M and Hit radio network and broadcasts 93 free-to-air television signals into regional Australia, has not indicated which publications that ACM has put on the table for a potential deal.
The ACM proposal follows a frustrating time for Southern Cross Media which had been engaging with rival KIIS FM owner ARN Media Limited (ASX: A1N) for a $250 million takeover deal since October last year.
ARN’s joint-venture partner in the proposed takeover Anchorage Capital Partners pulled out of the deal two weeks ago.
The deal was already fraught with “significant structural, technical, and other separation complexities” that Southern Cross says provided “execution risk”.
Southern Cross formally rejected an alternative solo proposal from ARN Media two days later, sinking any hope of a merger that would have seen Southern Cross give up its increasingly lucrative LiSTNR business.
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