Sandon Capital tests interest for change at top of Southern Cross Media

Gabriel Radzyminski, founder of Sandon Capital in the Sydney CBD. Picture: Alan Pryke

Executives at activist investor Sandon Capital are understood to have been quietly testing shareholder appetite to sack the directors and management at Southern Cross Media Group.

It comes after Sydney-based Sandon Capital, which has a record of agitating for change on share registers, on Monday emerged as a substantial shareholder in the Triple M and Hit radio network owner with 5.05 per cent.

Sandon chief executive Gabriel Radzyminski is understood to have been sounding out other investors about whether to roll some members of the board, chaired by Heith Mackay-Cruise and chief executive John Kelly, who was appointed in 2023.

Mr Radzyminski told DataRoom the holding was purely taken from an investment perspective and currently he had no further plans for change.

But, the understanding from some is Sandon had already identified a media operative to step in as a potential new chairman.

Sandon’s investment plan likely rests on other Southern Cross shareholders being supportive, and the understanding is the group may be holding off taking action for now.

However, sources say part of the appeal is a plan of attack where Sandon would capitalise from the business being sold to a larger strategic player once the AM stations were divested.

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

The radio broadcaster has a $160m market value, and while the market may not like Nine buying more traditional media assets, it would be gaining its radio NRL sports rights and its LiSTNR audio platform.

Southern Cross has already invested in the platform heavily and it would add to Nine’s existing radio assets.

Share trading in Southern Cross has been volatile since the start of the year and questions are being raised over whether the country’s largest radio broadcaster 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 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.

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.

The holding by Sandon has emerged in a week when further change is expected amid the top ranks within Australian listed media stocks, with all eyes on New Zealand Herald publisher and Newstalk ZB owner NZME and outdoor advertising company oOh! Media.

Among some of Sandon Capital’s other recent activist investor campaigns include Karoon Energy, where it raised concerns about its acquisition strategy under chairman Peter Botten in the context of its shareholder payout strategy.