Southern Cross Media (ASX:SXL) launches buyback, receives bids for TV business

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Highlights

  • Southern Cross Media intends to conduct an on-market share buyback of up to AU$40 million.
  • SXL has received several parties' unsolicited bids for its regional TV business.
  • The stock soared over 8% today; however, it has dropped over 21% in the last 12 months.

Shares of ASX listed media company - Southern Cross Media Group Limited (ASX:SXL) soared over 8% today.

 

Investors are keeping the stock on their radars after the company announced for a buyback offer and announced to receive bids for its TV business.

 

The stock traded 8.153% higher at AU$1.757 per share at 11:54 AM AEDT today.

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What is the Buyback offer?

As per the release, the company announced that it intends to conduct an on-market share buyback of up to AU$40 million.

SCA can buy back up to 10% of the issued capital in any 12 months without any shareholder approval as per the Corporations Act.

The company expects to generate continued and modest gearing and free cash flow. As a result, the management approved the buyback to enhance shareholder returns.

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SXL said it would fund the buyback from its existing cash reserves and debt facilities. Meanwhile, it will continue to invest in its digital audio strategy to grow audiences while boosting its revenue opportunities.

Television business 

The media company further announced that it has received unsolicited approaches from several parties signalling a potential interest in acquiring its regional television assets.

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However, these non-binding and incomplete bids didn't include details of timing, price, or conditions.

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Therefore, there is no guarantee of a transaction as of now. SXL said that it would continue to assess strategic options for its television business with the assistance of its financial adviser, Grant Samuel.

What next?

The company will engage with interested parties for a potential sale to benefit its shareholders. However, the management will continue to update the shareholders as required.

SXL share price movement 

The scrip has dropped over 21% over the last 12 months and fallen 16% on YTD this year. However, it has slightly improved in the previous week, gaining 1%.


 


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