Prominent investment fund manager Allan Gray Australia has grown its stake in Southern Cross Austereo (SCA), fuelling speculation that the radio network is set to join forces with another industry player.
According to a trading update on the ASX, Allan Gray has increased its shareholding in SCA from 13.87 per cent to 15.55 per cent.
The investment fund’s move comes after SCA chief executive Grant Blackley last week signalled interest in the out-of-home players as a potential suitor for the company, according to The Australian.
Following the new media ownership laws being passed in October last year, Blackley expects M&A activity to kick-off within the next six months between the big hitters.
The increase in Allan Gray’s stake in SCA also comes after the company posted a 21 per cent profit drop for the first half of the 2018 financial year, which Blackley said reflected “two consecutive years of heavy lifting” to improve its balance sheet.