Amidst a modest 0.04% uptick in the All Ordinaries Index (ASX: XAO) during Wednesday's lunch hour, one ASX All Ords share is making waves with a remarkable 22% surge, retaining an impressive 17.8% gain at the time of writing.
If you guessed Southern Cross Media Group Ltd (ASX: SXL), you're at the forefront of the virtual class.
Southern Cross Media closed yesterday's trading at 73 cents, and currently, its shares are exchanging hands at 86 cents each. The catalyst behind this surge is the announcement that the company has received a non-binding indicative proposal from ARN Media Ltd (ASX: A1N) and Anchorage Capital Partners Pty Ltd to acquire 100% of its fully diluted share capital.
The proposed deal offers 29.6 cents in cash along with 0.753 ARN Media shares per Southern Cross Media share, implying a total value of 94 cents per share based on Tuesday's closing price of 85.5 cents per ARN share. Despite this, the ASX All Ords share is trading 9% higher than the implied value.
ARN CEO Ciaran Davis highlighted the value creation potential in bringing together certain ARN and Southern Cross Media assets. The proposed transaction aims to create two distinct national media organizations competing independently in metro and regional radio.
However, Southern Cross Media management has labeled the takeover proposal as "unsolicited, complex, and highly conditional." They recommend shareholders take no immediate action, noting that the offer is subject to the unanimous recommendation of the Southern Cross board, due diligence, and regulatory approvals from the ACCC and ACMA.
In response to the proposal, Southern Cross Media has enlisted Grant Samuel as its financial adviser and Corrs Chambers Westgarth as its legal adviser to further assess the potential takeover.
As of today, factoring in the substantial boost, the Southern Cross Media share price is down 7% over the past 12 months and 20% in 2023. Investors are advised to stay tuned for further developments in this intriguing takeover scenario.