SYDNEY — Three years after selling his company Grundy Worldwide to Pearson, Reg Grundy has taken a foothold in the TV production arena by snapping up nearly 10% of Australia’s Southern Star.
Until now, Grundy was not allowed to take an active role in TV companies due to a non-compete agreement with Pearson.
Grundy’s Australian investment vehicle RG Capital bought a small number of shares in Southern Star when it floated in 1996, and topped up its holdings earlier this week, sending SS’ shares to a 10-month high of $A1.70 ($1.15). That values RG Capital’s 9.6 million shares at $A16.3 million ($11 million).
Higher revenues expected
The timing of the latest stock purchase may have been influenced by the anticipation of healthy end-of-financial-year results for Southern Star, which are to be released June 10.
“This is a real endorsement of our strategy. I’m glad Reg recognizes the value of our company. Television is the backbone of the industry,” said Southern Star exec chairman Neil Balnaves.
Balnaves added that RG Capital had assured him its investment was not “predatory,” which in any case would be unlikely, since 55% of the company’s stock is controlled by directors and senior management.
Balnaves said the question of whether Grundy was seeking, or would be given, a seat on the board, had not been discussed.