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Good evening,

It’s no secret Melbourne billionaire Alex Waislitz and his media executive offsider, Antony Catalano, are deep in the red, having bet on Southern Cross Media.

The pair, who control regional publisher Australian Community Media, went substantial at Southern Cross in March. Since then, the shares are down 38 per cent, although this hasn’t stopped their investment vehicle, 19 Cashews, from increasing its stake since then. At last count, they own 14.4 per cent. The stock has continued to decline, and last traded at 61¢ a share.

On Tuesday, The Australian Financial Review reported that Catalano had flown to Sydney to resurrect a takeover of Southern Cross by ARN Media. It appears Australian Community Media is interested in working with its rival on a bid.

It’s unclear if they’ll manage to pull something together. Remember, private equity group Anchorage Capital Partners walked away from the table after months of due diligence.

ARN, which owns the KIIS and Pure Gold radio brands, had lined up Anchorage to take over Southern Cross and carve up its assets between them. As reported, it was the regional TV signals that brought the deal unstuck – a report prepared by PwC found that earnings for Southern Cross’ regional TV stations had fallen sharply. Sources said Anchorage was also staring down the barrel of a sizeable termination fee if it wished to terminate a contract Southern Cross had signed with BAI Communications.

Street Talk understands this contract continues to draw attention.

Southern Cross signed a 15-year agreement with Broadcast Australia, a unit of BAI Communications, in 2019 to outsource its television and radio broadcasting transmission services. Sources told Street Talk the deal required Southern Cross to cough up $19 million a year – or a total of $190 million over the next decade.

While the deal is now five years old, Street Talk understands its heft is weighing in the context of Southern Cross’ declining revenue and earnings.

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

The Australian sharemarket rose on Wednesday, buoyed by strong results from Pro Medicus and Seven Group Holdings in a busy week of company earnings.

Click here for the latest equity market wrap.