Activist investor sizes up Southern Cross Media

Radio business Southern Cross Media has experienced volatile share trading since the start of the year. Picture: iStock

More details are filtering into the market about the plans activist investor Sandon Capital may have for the Southern Cross Media Group.

DataRoom understands Sandon, a Sydney-based activist fund which agitates for change and run by Gabriel Radzyminski, had lined up highly regarded media executive Matt Bayliss to take over as chairman of the country’s largest radio broadcaster.

Mr Bayliss, a former chief financial officer at publisher Fairfax Media (now part of Nine Entertainment) currently chairs taxi company A2B Australia and was previously the managing director of Gray’s Australia.

He also ran Red Rooster and Oporto Chicken owner Quick Service Restaurant Holdings, previously owned by both Archer Capital and Quadrant Private Equity and chaired New Zealand’s Burger King on behalf of Anchorage Capital Partners.

Market sources suggest shareholders believe he would be well placed for the chairman job but they remain currently supportive of the media company’s existing chair, Heith Mackay-Cruise, who holds director roles at other technology companies and was appointed to the chairman job a year ago.

As earlier reported by DataRoom, Sandon Capital has tested appetite for board and executive changes at Southern Cross, as the fund manager emerged with a 5.05 per cent stake in the Triple M and Hit radio network owner last week.

This column earlier reported Nine Entertainment, which is in the process of selling its stake in Domain Holdings, has been eyeing up the business.

But, the understanding is Nine has cooled on the opportunity for now and favours smaller online businesses for future mergers and acquisitions following the $2.8bn likely sale of its 60 per cent stake in online real estate group Domain to CoStar.

Southern Cross has a $166m market value and has invested heavily in its LiSTNR audio platform.

Share trading in Southern Cross has been volatile since the start of the year and questions are being raised over whether it was moving fast enough on its cost cutting program and whether there were enough directors on the board with industry expertise.

It offloaded television licences in December to Network 10, announcing the transaction several days after it said it had refinanced its debt facilities and announced a plan to cut jobs and other costs.

Last year it was earmarked for a buyout by rival ARN Media and Anchorage Capital Partners but that plan collapsed.

Among other major shareholders in Southern Cross are Australian Community Media owner Antony Catalano, who is considered a possible buyer and has bid previously, and Spheria Asset Management.

For the six months to December, Southern Cross Media Group posted a $3.2m net profit, up 5.5 per cent on the previous corresponding period as revenue increased.