‘You’ll be feeling concerned’: What ARN’s SCA bid really means
After ARN Media announced a bombshell bid to take over rival radio competitor, Southern Cross Austereo this week, the industry is rife with questions about the finer details of the proposal and what it all means.
On Wednesday morning, alongside private equity firm, Anchorage Capital Partners, ARN made a non-binding indicative offer to acquire 100% of the fully diluted share capital of SCA.
ARN announced plans for “two separate, national media organisations that will compete independently of each other on metro and regional radio, and more broadly.”
The move would see ARN as a “focused” metro radio network of 10 stations across Sydney, Melbourne, Brisbane, Adelaide and Perth – each city featuring a KIIS and Triple M brand – and an aim to increase its regional radio footprint from 47 to 88 stations.
Appearing on the latest episode of the Mumbrellacast, former national director of operations and general manager of 2DayFM and Triple M Sydney and former Macquarie Media CEO, Adam Lang, described the proposal as “very cunning… and certainly bold.”
“So ARN have looked at SCA and said, ‘How can we take them out and make a different company?’” he said.
“They’ve essentially said, ‘We’re going to merge the two and take the bits we want and allow the rest to be free as an independent SCA.’”
Lang noted the proposal of shifting Triple M from SCA to ARN as an interesting move and one that is likely being done because its broadcast portfolio includes sporting rights.
“Triple M is really rock and sport and comedy, but that sport part of that DNA is a serious competitive offering, a commercial offering,” he explained.
“They make a big investment in it, and they make a good return. So, I can see ARN looking at that and saying, ‘Actually we want that one, we want KIIS and Triple M.’”
Though he expects the proposed bid to take some time, given that Wednesday’s announcement itself provided no timeline at all, Lang said the impact will be felt by advertisers who have campaigns on both ARN and SCA; particularly, will this affect current and future campaigns?
“You know, if you’re working at either one of these companies, yeah, you’ll be feeling concerned,” Lang said.
It’s fair to suggest that the staff at both networks will be greatly impacted by the proposal both in the long and short term. As a source told Mumbrella this week: “No one at SCA saw this coming.”
“Particularly if you’re at SCA and, and this is the bold announcement from ARN – what’s my role in this? What’s the future look like? And one of the great battles for both companies, but probably mostly SCA, is keeping everyone focused,” Lang continued.
“You know, you’ve still got to generate an audience every day. You’ve still got to activate, sell, and execute campaigns every day.”
In its own statement on Wednesday, SCA confirmed it had received the offer, calling calling it a “unsolicited, complex and highly conditional”.
“The Indicative Proposal is subject to the unanimous recommendation of the SCA Board, due diligence, shareholder and regulatory approvals from both the ACCC and ACMA, and other terms and conditions,” SCA’s statement reads.
Click here to listen to Lang’s full comments on the Mumbrellacast.
