SYDNEY, AUSTRALIA: ARN Media, an Australian media company that owns radio and outdoor advertising assets, has acquired a 14.8% stake in Southern Cross Media Group (SCA), a rival radio and television broadcaster, for $38.3 million.
ARN Media, which is listed on the ASX (A1N), said in a statement on Tuesday that it sees the equity position in SCA as representing attractive value for its shareholders.
SCA, which is also listed on the ASX (SXL), operates 99 radio stations under the Triple M and Hit network brands, as well as regional television stations affiliated with the Seven, Nine and Ten networks.
SCA said it noted ARN Media’s announcement and welcomed it as a supportive shareholder. However, it also pointed out that under the Broadcasting Services Act 1992 (Cth), ARN Media would be deemed to control SCA’s commercial radio and television broadcasting licences if the company held an interest of 15%.
SCA added that as ARN Media and SCA control the maximum permitted two commercial radio broadcasting licences in all metropolitan markets and several regional markets, ARN Media is prohibited from holding an interest of 15% or more in SCA.
The deal comes amid a challenging environment for the media industry, which has been hit by the COVID-19 pandemic and changing consumer habits. Both ARN Media and SCA have reported declines in revenue and earnings in their latest financial results.
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