THE BIZARRE TWISTS BEHIND RADIO OFFER

NINE’S move to take out the minority shareholders – read: John Singleton – in the Macquarie radio network, home of best buddies Alan Jones and Ray Hadley north of the Murray and their similarly twined counterparts Ross & John and Neil south of it, was both fully expected and utterly bizarre.

Just as expected as the offer itself, was that it will be in cash. There is no way that Singleton was ever going to swap a relatively influential, if minority, stake in Macquarie for a completely insignificant tiny stake in the combine of Nine and the Fairfax papers and Macquarie by taking Nine shares.

Nowhere near as expected, though, was that the cash offered – $1.46 a share – was a thumping 28.5c a share less than Macquarie’s last traded sale a couple of weeks ago.

Normally – like, every time – a bidder has to offer something more than the latest market price, other than those rare times (we and especially regulators hope, that they are rare) when the offer has ‘leaked’ into the market and the price has zoomed ahead of the formal bid disclosure.

There’s been none of that this time. Yes, Macquarie’s share price has risen over the last few months, but broadly just in line with the overall market – including the share price of its controlling parent Nine.

Indeed that last closing price was well down on the levels around $2.20 of just a year ago, when speculation of a bid by Nine to mop up the 45.6 per cent of Macquarie it didn’t own was at a peak. And Singleton was reported as wanting $2.50.

Yet out of the blue Nine offered just $1.46 – and the “independent directors” met on Sunday and immediately unanimously recommended Carnegie 4 per cent and activist investor Geoff Wilson also 4 per cent.

That leaves barely 5 per cent in the scattered hands of other shareholders. It also means that provided Singleton accepts, the bid is almost a done deal; and it certainly is a done deal if Singleton and Carnegie accept.

Now, I’ve put independent directors in quotation marks not to question their independence as such, but because they are using it in a very specific sense — that is, independent of the bidder, Nine.

There were three: chairman Russell Tate, Louise McCann and Monique Anderson.

It is the third that is interesting. Yes, she is independent of the bidder Nine, but she is not considered an ‘independent director’ in governance terms because she represents Singleton and his 32 per cent holding.

Indeed, until the Nine takeover Tate was not considered ‘independent’ as he was then executive chairman; but you might reasonably conclude that Nine was happy for him to continue as a non-executive chairman under their controlling stake.

One can also only reasonably conclude that with Anderson recommending the offer Singleton is prepared to sell at the $1.46 and make it allbut a done deal.

But then what gives it a further bizarre twist is that the offer is conditional on Singleton entering a ‘noncompete’ – they call it a “deed of restraint” – for up to three years.

Nine obviously doesn’t want to hand over the cash to Singleton, only to see him steal away the radio stars, as he did first time around to set up Macquarie in the first place.