Credit: Denise Jans via Unsplash
Activist investor Sandon Capital, which wants to sack the board of directors at broadcaster SCA, is getting pushback from major investors.
The fund manager, owning more than 5% of the company, has attacked a decision to resume paying dividends, the announcement of an “unrealistic” executive bonus scheme and says SCA needs to further reduce debt levels.
However, media owner Antony Catalano and billionaire Alex Waislitz, with a 14.42% stake in SCA via investment vehicle 19 Cashews, have gone public against the activist fund’s latest move.
Sandon had asked regulator the Takeovers Panel to lift a restriction on ARN Media Limited -- a competitor to SCA -- voting its 6.83% of SCA.
The activist fund wants ARN to be able to vote in SCA's next general meeting, where a board spill motion will be put to shareholders.
The Takeovers Panel had in 2023 ruled “unacceptable” how ARN acquired shares in SCA from fund manager Allan Gray.
“I think Sandon’s panel application is an insult to all shareholders who have obtained their shares legally,” Catalano told Capital Brief.
“It’s appalling that any reputable investment fund would seek to support the purchase of shares that the panel found to have been obtained in unacceptable circumstances.”
ARN, backed by private equity firm Anchorage Capital Partners, in October 2023 launched a takeover bid for SCA. This crumbled when Anchorage pulled out.
Catalano and Alex Waislitz, the owners of regional news company Australian Community Media, then tried their own takeover of SCA but this didn’t get traction.
Now Sandon has given formal notice to move resolutions to remove directors Heith Mackay-Cruise, Ido Leffler, Carole Campbell and Marina Go.
However, the board of directors say they have support from more than 50% of its voting capital including Thorney Investment Group (and Associates) (15%), Spheria Asset Management (10%) and Ubique Asset Management (10%).
“SCA considers the resolutions (to spill the board) being proposed by Sandon are a considerable distraction and unnecessary cost,” the directors said in a notice lodged with the ASX.
SCA, in a trading update earlier this month, reported “strong” audio revenue, up about 9% and ahead of its own guidance, for the first four months of calendar 2025.
However, the post-federal election advertising market is short with limited visibility, which makes it difficult to forecast in the lead up to the end of the financial year and beyond.
The company reported revenue up 5.3% to $209.7 million for the half year to December, delivering on its "transformation strategy". Net profit after tax was up 5.5% to $3.2 million.
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