Sandon Capital Investment believes in the power of audio. So much so that the Australian-based activist investment firm who buy shares in companies they perceive as undervalued and underperforming felt like they were nearing a finish line after Southern Cross Austereo (SCA) finally divested itself of its TV assets to Seven West Media, with the following positive full year results seeing share prices go up 10c in a single day.
But then, at the end of September, SCA shocked Sandon, who had purchased an additional 2.5 million shares in the company only days before, with an announcement of a merger with Seven West Media, the very company that SCA, in Sandon’s words, had offloaded the ‘moribund TV assets’ to.
According to Sandon’s monthly report they had no recourse for a vote or voice on the decision, as 11.3% shareholders, nor were they allowed any say in the ability by SCA to issue shares.
SCA and SWM have entered into a Scheme Implementation Deed (SID) to integrate together their metro and regional, free-to-air TV, audio, streaming, digital and publishing assets. As it stands SWM shareholders will receive 0.1552 SCA shares for every SWM share, which would result in SCA shareholders owning 50.1% and SWM shareholders owning 49.9% of the combined group.
The SCA AGM, where Sandon was seeking to remove non-executive directors Heith Mackay-Cruise, Ido Leffler, Carole Campbell and Marina Go from the SCA board, plus CEO John Kelly according to this monthly report, is occurring on Monday November 24 at 11am. Sandon is continuing their campaign in earnest towards their goals. SCA have responded saying they are confident their shareholders will vote against it and the shares proposed to be issued.
Jen Seyderhelm is a writer, editor and podcaster for Radioinfo. Pictured is Sandon Capital CEO Gabriel Radzyminski.