Southern Cross Media Group Limited (ASX: SXL) has received a notice from Sandon Capital Pty Ltd, acting on behalf of its investors, proposing an amendment to the company’s constitution. Southern Cross Media Group, also known as SCA, is one of Australia’s leading media companies and the home of LiSTNR, as well as the Hit and Triple M networks. The proposed amendment, submitted under section 249D of the Corporations Act, seeks to restrict SCA’s ability to issue more than 25% of its shares without shareholder approval.
The resolution requires a special majority of at least 75% of votes cast to pass. The SCA board has noted that the proposed amendment is inconsistent with the planned merger with Seven West Media, announced previously. The company was notified late yesterday of the notice by registered holders of more than 5% of SCA’s ordinary shares — One Fund Services Limited and One Managed Investment Funds Limited.
However, key shareholders representing more than 25% of SCA’s shares have already indicated their intention to vote against the resolution. Thorney Investment Group (and Associates), holding 15%, and Spheria Asset Management, controlling 14% of voting rights, have both advised that they do not support the proposed amendment. These shareholders have consented to the inclusion of their voting intentions in the company’s public release.
Given the stated opposition from these major shareholders, SCA believes the resolution is unlikely to pass. The board and management will now focus on implementing the proposed merger with Seven West Media, which they believe is in the best interests of all SCA shareholders, and will deliver the expected synergies and value accretion. This information was approved for release by the Company Secretary.
