Macquarie Bank Group announces purchase of majority of regional radio assets of DMG Radio Australia for $193.5 million

02 September 2004

Regional Media Pty Ltd, a member of the Macquarie Bank Group, today announced it had signed a share sale agreement with DMG Radio Australia to acquire most of the DMG Radio Australia regional radio assets (DMG Regional Radio) for $193.5 million.

These assets include 57 predominantly music-based stations in 29 regional markets in New South Wales, Queensland, Victoria, South Australia and Western Australia.  DMG Radio Australia stations in the Sunshine Coast and Central Coast are not included in the share sale agreement (nor are DMG Radio Australia’s metropolitan licences).  Completion of the transaction is expected to occur before 10 September, subject to conditions precedent.

Regional Media Pty Ltd will incorporate the DMG Regional Radio stations into a proposed unlisted media investment vehicle,  which will also include RG Capital Radio Limited.

Mr Tim Hughes, the former Chairman of RG Capital Radio, who joined Macquarie at the time of announcement of the RG Capital Radio transaction, will be the Executive Chairman of Macquarie’s proposed media group.

“The proposed media group will seek to invest in other media assets outside state capitals, and the signing of this agreement with DMG Radio Australia is the next step in fulfilling this strategy,” Mr Hughes said.

The RG Capital Radio and DMG Regional Radio portfolios together comprise 93 predominantly music stations throughout regional Australia.

“Regional Media will be a new and vibrant player in regional media in Australia.  Importantly the transition into a new radio group requires little day to day interruption and all stations in the group will continue under the same local management and formats.  The merged entity will be able to produce even better product for the local communities we operate within.  We also believe we will be in a stronger position to compete for national sales against other media such as television and newspapers.”

“We intend to expand our business to provide an exciting and rewarding environment for our listeners, clients and importantly our staff throughout regional Australia,” Mr Hughes said. 

The Australian Broadcasting Authority has permitted Regional Media, under Section 67 of the Broadcasting Services Act, up to 12 months to manage the transition and sale of seven (out of a total of 93) licences in markets where there is crossover between the DMG Regional Radio and RG Capital radio business.  Regional Media  is also in consultation with the Australian Competition and Consumer Commission (ACCC) and has offered undertakings regarding the transition and sale of the licences.  The ACCC is currently considering these proposed undertakings.

The Chief Financial Officer for Macquarie Bank, Mr Greg Ward, said the annualised impact on Macquarie Bank’s profit as a result of consolidating both DMG Regional Radio and RG Capital Radio, after taking account of depreciation, amortisation and funding costs, will be marginally positive.  Mr Ward stated that the impact on Macquarie Group’s capital position will be a reduction to the Tier 1 capital ratio of approximately 1.2 per cent.

For further information, please contact:

Erica Sibree
Investor Relations
Macquarie Bank Limited
Tel: (612) 8232 5008
Mobile: (614) 1302 6309

Matthew Russell
Public Relations
Macquarie Bank Limited
Tel: (612) 8232 4102
Mobile: (614) 1069 9532