Good evening,

It’s the deal that refuses to die.

On Friday, Southern Cross Media pulled the pin on buying up regional rival Australian Community Media, the amalgamation of publishing businesses put together by Antony Catalano and his billionaire backer Alex Waislitz.

That proposal had already superseded another – to merge Southern Cross, which operates regional television networks and runs the Hit and Triple M radio brands, with ARN Media. That fell over earlier this year when ARN’s bidding partner, Anchorage Capital Partners, pulled the plug.

Over the weekend, however, sources said that UBS-advised Southern Cross and Jefferies-advised ARN were preparing to restart the merger dance they had abandoned. One suggestion at the top of mind for dealmakers is if it could really take three to tango. Could Catalano’s Australian Community Media effectively assume Anchorage’s original position? That way, the assets of all three companies would be up for grabs.

Of course, there’s no love lost between the two companies, with major shareholders lambasting Southern Cross for dragging its feet on the deal. Southern Cross naturally has a beef with how much time and effort it put into assessing the collapsed ARN-Anchorage deal.

But the rationale for a tie-up remains intact, namely the need to bring the two largest metro radio companies together to create scale benefits in an advertising market dominated by the US tech giants. And it’s clear both parties can’t just stand still with share prices in the doldrums and earnings declining.

Read the full story tomorrow and more on the Street Talk page.

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