Credit: Norbert Braun Unsplash
Activist fund manager Sandon Capital has called for a special vote of shareholders at Southern Cross Media to spill several directors on the board of the media company, including chairman Heith Mackay-Cruise.
Sandon, with 5.5% of the company, a combination of radio group SCA and television and publishing house Seven West Media, also wants to get rid of board directors Ido Leffler and Marina Go.
The takeover of Seven West Media by SCA was meant to create a company with a market capitalisation of $430 million. The company’s shares closed on Friday at 59.5 cents each, giving a market value of $285 million.
“We vigorously opposed the merger when it was first proposed, right through to the end, and, in fact, we tried to change the constitution,” Gabriel Radzyminsk, Sandon chief investment officer, told the AFR.
“This is a continuation of our campaign from last year. The directors who entered into the transaction are those we are seeking to move.
“Our application is targeted towards those who approved the merger from the Southern Cross side.
“We have no issues with the Seven West directors. They simply accepted an offer that was too good to refuse … the market has voted – just look at the share price, it’s appalling.”
The share register of Southern Cross has been changing.
Last month Bruce McWilliam, a former Seven executive described as “a doyen of the media industry” and right hand man to billionaire Kerry Stokes, took a significant stake in his old company.
Filings to the ASX show McWilliam has 5.33% of SCA after going on market to buy up shares in the television and radio media group.
“I believe in the company and the shares came up at a good price given what they were at before the merger,” McWilliam said.
“They were almost half down and it’s a top TV network and strong radio network, both with national platforms.”
His old boss, billionaire Kerry Stokes, has a 20% interest in Southern Cross via his ASX-listed company SGH.
Rohan Lund, a television executive and pioneer in digital media, was last week appointed CEO of Southern Cross.
The announcement put John Kelly, who ran SCA before the merger with Seven West and who was interim CEO at Southern Cross, running both TV and radio, back running audio.
Chairman Mackay-Cruise announced the appointment of Lund, after a “highly successful search process” found the right person among the board of directors. Lund joined the SCA board as a non-executive director on March 1 this year.
Lund is a former chief executive of the NRMA, COO of Foxtel, COO of Seven West Media and founding CEO of Yahoo!7, a digital joint venture formed in 2006 between Yahoo! and Seven West Media.
He replaces Jeff Howard who stepped down in February on the eve of the release of the group's December half results, its first combined post-merger results, for both television and audio, with total revenue down 1.5% to $1.008 billion.
Television revenue was down 2.1% to $712 million while audio was up 3.2% to $216.5 million. No dividends were declared, with the company focused on debt reduction.
The new CEO has a few major items on his to-do list, including reviving sliding ad sales at the television side of the business, the part which came from Seven West.
Another is the question of the company’s publishing assets, inherited when Seven West media was rolled into SCA.
These are Western Australian based news titles, including The West Australian, The Sunday Times, community newspapers, state regional titles and the Nightly.
The assets are reportedly on sale for the right price.
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