SCA has rejected an “unsolicited” takeover bid put forward by ARN and Anchorage Capital in October last year, after deciding that it is not in the best interest of shareholders.
In an ASX update put out this morning, SCA said that it had “constructively engaged” with ARN and Anchorage Capital on the deal that was first put forward last year.
After evaluating the “additional materials regarding the expected earnings profile of the ARN Newco shares to be offered to SCA shareholders” it has become apparent that there have been fundamental changes to the economics of the Indicative Proposal”.
This included “an increase in the leverage and reduction in the earnings base of ARN Newco”. These changes have “significantly reduced the value of the indicative proposal to SCA shareholders,” ARN said.
It did add that it would be “willing to consider any revised proposal which SCA considers to be consistent with the consortium’s initial proposal” and in the “best interest” of shareholders.
SCA chair Rob Murray said the proposed deal undervalued the company.
“Our Board acknowledges the strategic merit underlying the Consortium’s proposal but considers that the current terms of the proposal undervalue SCA,”
“We are open to considering proposals from the Consortium or other parties that would deliver fair value and be in the best interests of all our shareholders. In the meantime, we remain focused on continuing to optimise the audio ecosystem we have created across broadcast radio and digital audio. This is central to our strategy and our value proposition, and we are committed to converting our audience leading positions into sustainable growth and returns to our shareholders.”
SCA CEO John Kelly told B&T last week that SCA was reevaluating the financial so the deal.
“There’s the ever-expanding growth of LiSTNR, which we don’t believe is being factored into the argument that was made in October, this is new news”.
“We’re working collaboratively with the consortium and their advisors to try and assess ARN NewCo, which would be a brand new company with Kiss Network, Triple M Network and digital JB,” Kelly said. “That takes time because it’s a brand new structure and we need to work out the assumptions for that model and the earnings for that model. We need to compare that to the standalone offering of SCA”.
