Radio and TV group owner Southern Cross Media (SCM) has made a bid to acquire Austereo to increase its radio holdings in Australia. Both are publicly traded companies, so the market immediately cast its vote on the proposed merger.
Under the terms proposed by SCM, it would pay $2.15 (Australian) per share for Austereo (including a five-cent pre-closing dividend payment by Austereo), which would total $741 million (Australian, or $737.2 US). The market bid up Austereo shares on Monday by 10.6% to $2.09. Meanwhile, SCM shares fell 11.6% to $1.91.
According to The Australian newspaper, some analysts fear that SCM might not be able to keep the top-rated duo hosting morning drive on Austero’s Today network.
For his part, SCM CEO Rhys Holleran is pitching the advantages of a truly national coverage and opportunities to attract more cross-platform advertising sales
Melbourne-based Austereo has two major radio networks, Today and Triple M, each with stations in Melbourne, Sydney, Brisbane, Perth and Adelaide.
SCM already owns 68 commercial radio stations in 38 markets, organized as regional networks. It also owns 14 over-the-air TV stations. The company proudly claims “the ability to reach a potential audience of approximately 7.5 million people, or 95% of Australia’s population outside the mainland State capital cities.” With the addition of Austereo it would also reach those big cities.