Aegis Acquires Mitchell Communications Group

Big media sector news for this week was when Australian advertising company and media buyer, Mitchell Communication Group (ASX:MCU) has been sold to British Aegis Group in a $363 million acquisition deal.

Mitchell Communications Takeover

Chairman Harold Mitchell, 68, the man who started the business 34 years ago has opted to accept shares in the London Stock Exchange listed Aegis with the condition that he will not sell 85 percent of his shares for two years.

Harold Mitchell and his son Stuart Mitchell owns 40 percent of Mitchell Communications Group which is worth up to 150 million. The takeover deal has also valued the company at 16 percent more than its market capitalisation on Wednesday of $313 million. That is expected to make Mitchell Aegir's second-biggest shareholder, as well as executive chairman of the combined Aegis-Mitchell organisation in Australasia.

The acquisitions deal is a sign that advertising markets is improving. Australia is the eigth largest media buying market. Aegir (LON:AGS) has offered $1.20 per MCG share, as well as a fully franked dividend of 5 cents a share if the takeover acquisitions deal is approved. Early Wednesday, Aegis took an option on a chunk of Mitchell Communications stock in a bid to block any moves by another media company. Mitchell shares were placed in a trading halt. The offer price is 31 per cent higher than the average price of Mitchell Communication Group shares over the past three months.