SYDNEY: Macquarie Media Group and Fairfax Media have entered into an arrangement to buy Southern Cross Broadcasting and break up the company's media assets.
Under the $1.3 billion deal, Macquarie Media Group (MMG) is proposing to acquire all of the shares in Southern Cross Broadcasting and then sell its radio assets, which includes the 2UE and 3AW talkback stations and Satellite Music Australia, to Fairfax Media.
Macquarie Media will retain Southern Cross’ regional TV assets, which includes Network Ten affiliate stations in regional Queensland, NSW and Victoria, as well as Seven Network affiliates in Tasmania and Darwin.
The proposal has unanimous support from the directors of Southern Cross Broadcasting.
Ronald Walker, chairman of Fairfax Media, said both companies were the best placed in the media to propose the acquisition.
“And we are the best stewards for these assets. This proposal maximises the value to Southern Cross shareholders,” Walker said in a statement.
Another part of the deal will see MMG acquire nine commercial radio licences from Fairfax Media for approximately $480 million.
The radio licenses cover five regional licence areas in South Australia and Queensland. The sale and purchase transactions are conditional on the successful completion of the Southern Cross and regulatory approvals.
The fate of Southern Cross managers, including MD Tony Bell, is yet to be decided. However Macquarie and Fairfax are expected to draw on the company's management expertise to ensure all businesses are integrated and operated effectively.
A joint statement from Fairfax and MMG said key business roles are expected to be largely unchanged, however final decisions regarding the structure of the company will be announced following completion of the sale.
Following the sale MMG will hold the largest regional media company in Australia, with Southern Cross’ TV assets joining MMG’s Regional Radioworks division.
MMG’s total cost for Southern Cross Broadcasting is approximately $820 million, which includes $165 million for its strategic stake in November last year.
Ronald Walker said the proposed radio acquisition represent a meaningful expansion of the Fairfax Media empire.
“Our proposed acquisition of the metropolitan radio and video assets of Southern Cross is a meaningful expansion of Fairfax Media’s businesses and our leadership position in key markets in both content and distribution,”Walker said.
“It builds on our achievements – our merger with Rural Press, the acquisition of Trade Me, our publishing business in New Zealand, and our strong success online in Australia – in extending Fairfax Media’s growth in publishing, digital and electronic media.”
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