Up, up, up it goes, Macquarie Radio, the latest market plaything of the
Sydney radio industry. Up another 35c in the first 15 minutes of
today’s trading to $1.85. The premium now a massive 85% to its
issue price of $1 a share and in the process spreading joy and riches
across some in the radio empire of John Singleton.

The Parrot – aka Alan Jones – is worth more than $18 million on paper.
His boss, John Singleton, more than $102 million (at the $1.85 price),
Mark Carnegie, Singleton’s partner in 2GB, more than $22 million and
Ray Hadley, 2GB’s morning shrieker, $185,000 on his 100,000 shares.

CEO Angela Clark got 1.4 million shares in the float through a
company-financed loan. That’s now worth a gross $2.5 million. Nice
work. I
wonder what Louise Barrett, the former boss at Macquarie thinks now
that she’s working for PBL and the Nine Network in Melbourne?

The stock is so closely held only 4% of the equity was listed – that’s
3.2 million shares. It’s going to be a highly volatile share and watch
it move when the Sydney radio ratings are issued! The listing of Macquarie Radio has made The Parrot, much
richer – $14 million on Wednesday. At the price of $1.85 the 11.3
million options have a gross value of $18.3 million, with more to come
as investors chase the tightly-held stock. It’s only a paper profit,
but it’s better than a paper loss.

Macquarie Radio was listed as a way of ‘silencing’ the Parrot whose
contract demanded he be given liquidity and an exit. It was a way of
crystallising the options issued to Jones when he
jumped from 2UE to 2GB at the start of 2002. Jones’s options were priced at just 22.4c, so this morning he is 825%.
But Jones has a conundrum now. How does he take value out of 2GB and
Macquarie without ruining the share price? At the first sign of him
selling you can bet the price will tank, no matter what the spin! The
Parrot’s audience is so loyal that we wouldn’t be surprised if they
were blindly driving much of the buying support.

Talk about golden handcuffs. Couldn’t happen to a nicer bloke. Trapped
in Sydney radio, as rich as Croesus and unable to realise his millions
without ruining the share price and making boss Singleton and others
poorer!

The only way he could realise value would be through some sort of scrip
merger with another media company that gave him some liquidity because
2GB is simply not worth the money that the market is now ascribing to
it. However, that would require the agreement of John Singleton and
friends, something that wasn’t required to get this compliance listing
away. Here’s a Sydney Morning Herald

report on yesterday’s float.

Peter Fray

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