Southern Cross Media Group is facing a challenge from shareholder Sandon Capital, which is attempting to amend the company’s constitution. This move aims to prevent Southern Cross from issuing more than 25 per cent of its shares without prior shareholder approval. Sandon Capital, which holds an 11.3 per cent stake in Southern Cross, initiated this action in response to the audio company’s plan to issue nearly 100 per cent of its shares as part of a proposed takeover of Kerry Stokes’ Seven West Media. Southern Cross Media Group operates as a media company, primarily focused on radio broadcasting and television. They deliver diverse content and entertainment to audiences across Australia.
Sandon Capital’s managing director, Gabriel Radzyminski, has criticised the proposed merger with Seven West Media, describing it as “diworsification”. The proposed constitutional change, if successful, could potentially derail the merger, particularly if shareholder approval is required for the share issuance and shareholders ultimately reject the proposal. This challenge introduces a layer of uncertainty to the planned acquisition and raises questions about the future direction of Southern Cross Media.
However, Southern Cross Media’s board has expressed confidence in its ability to overcome Sandon Capital’s challenge. The board stated that major shareholders Antony Catalano and Alex Waislitz, holding 15 per cent through Thorney Investment Group, along with Spheria Asset Management, possessing a 14 per cent stake, have indicated they will not support the proposed constitutional change.
Southern Cross Media’s board believes that the resolution proposed by Sandon Capital will not pass, given the opposition from key shareholders. As a result, the board intends to concentrate its efforts on implementing the proposed merger with Seven West Media. The company will now proceed with its plans, pending any further developments or legal challenges from dissenting shareholders.
