Catalano Turns to Barrenjoey, ABL to Sell his Media Business

In exchange for a portion of Southern Cross Austereo, Australian Community Media chairman Antony Catalano has enlisted Barrenjoey and the legal firm Arnold Block Leibler, offering his whole regional media empire.

Surprisingly, Southern Cross said on Tuesday that it has received a proposal from ACM, the company that publishes The Land, Newcastle Herald, and Canberra Times.

ACM, controlled by Rich Lister Alex Waislitz and Mr. Catalano, inquired as to whether Southern Cross would buy its division of agriculture and its fourteen daily print and digital news outlets as well as its regional and metropolitan titles. Southern Cross is the owner of a network of regional TV stations, regional radio assets, and the Triple M and Hit radio networks.

The Southern Cross board stated in an ASX notice that it will look into the idea and advised shareholders to do nothing. Mr. Catalano chose not to respond.

This is the most recent development in a protracted takeover struggle between Southern Cross and ARN Media, the rival ASX-listed audio firm that runs the Pure Gold and KIIS radio brands.

In order to acquire Southern Cross and divide its assets between them, ARN and Anchorage Capital Partners initiated a takeover in October of last year. When Anchorage withdrew from the proposal earlier this month, it failed.

Mr. Catalano has been circling the offer for a while, publicly criticizing ARN's initiatives and gradually acquiring 12.8% of the business. In the past, he has attempted to purchase a greater portion of Southern Cross by offering them more shares in exchange for the sale of his major newspaper properties. The board of Southern Cross stated that this new offer is "materially different" from ACM's prior offer, which was promptly turned down.

Because it contains more of a digital presence and Mr. Catalano's agricultural holdings, Southern Cross is reportedly more interested this time around. An email outlining the bid's reasoning was sent to ACM staff members on Tuesday after news of it became public. The communication was signed by Mr. Catalano.

If the planned deal goes through, it will build a dynamic multimedia business that produces content for TV, print, internet, and audio platforms. The combined firm would be Australia's biggest regional media organization as well as the nation's top radio network, he said.

"It would also comprise the top agricultural media company in Australia. That would include Alex Waislitz and myself becoming significant shareholders of SCA and reaffirming our dedication to expanding our critically essential media organization for the good of our employees, clients, and all Australians who depend on our media as their reliable voice on a daily basis.

He went on, saying that the two corporations have started their due diligence, which should take "relatively short." Everybody involved is hoping to receive a verdict by the end of June. Mr. Catalano informed the workers that ACM has hired Barrenjoey as its finance consultant and Arnold Block Leibler as its legal adviser.

He said the combination would expand companies like ViewJobs, FarmBuy, and Farmers' Finance Australia and produce a company that would "truly answer advertiser needs."

For $125 million in 2019, Mr. Catalano and Mr. Waislitz purchased ACM from Nine Entertainment, the company that publishes The Australian Financial Review. Since then, Mr. Catalano has sold off assets, closed certain newspapers, and used the media space to launch new classified companies. He has already expressed to others his opinion that the company has increased in value since he purchased it.