Southern Cross Media to face the music at AGM over spurned offers
Southern Cross Media will hold its AGM on Monday, and we imagine that chairman Heith Mackay-Cruise will face an uncomfortable grilling over, well, just about everything going wrong with the management of the business.
We hear he’ll just scrape over the line during a re-election ballot, but Adore Beauty chair Marina Go, appointed to the board last month, and notably without any broadcast experience, is unlikely to survive. She is quite certain to be dumped, and there’s certainly a view that Mackay-Cruise should be following her out (editor’s note: Go ended up surviving the ballot with 99.46 percent of shareholder support).
Just take a look at the joint. The SCA board has received five transaction proposals over the past 12 months and shrugged off each of them as the share price kept tumbling – from highs of $1.05 in November last year to Friday’s pitiful close of 54.5c.
No doubt that shareholders like Alex Waislitz have bigger fish to fry at the moment – especially with the legal bother that blasted him all over The Australian’s website this week – but is it any wonder that investors are pissed?
The only suitor still hanging out to pick off bits of SCA is the Maurice Newman-chaired ADH TV, a conservative broadcaster backed by Alan Jones that is trying to expand its footprint with an offer to buy SCA’s regional television assets.
But let’s rewind. In October last year, SCA received a cash-and-scrip takeover offer from ARN Media and Anchorage Capital Partners valuing the company at roughly 94c a share. Five months later, the offer was finally rejected, and so too was SCA’s chair, Rob Murray. He lost his job in what the company termed a “board renewal” process (or in what Murray termed, far more politely, as a fast-tracking of his own retirement).
One month later, SCA received an updated, all-scrip offer from ARN that implied a value per share of about $1.20. Again, SCA snubbed the proposal, this time deciding not to even engage. It did the same with an offer from Australian Community Media, owned by Antony Catalano and the aforementioned Waislitz. All while the share price kept falling.
Then comes a kick in the teeth for shareholders when they find out there’s no final dividend for FY24, a first for the company in its near 20-year listing on the ASX. And it wasn’t for a want of cash – the company has $10.5m sitting on the books – but rather because SCA’s laden with $118.5m in drawn debt, more than double its position of FY21. The available cash is being preserved to reduce the debt amount.
A company that rejects so many offers of a deal amid a tanking share price, rising debt, consolidation across the media landscape … well, it must see great value in itself. Is that why the chair’s barely going to pass the shareholder ballot for re-election while also facing an embarrassing vote on the remuneration report?
Meanwhile, the only suitor left is the mob affiliated with Jones, and he’s dealing with some inconveniences that tend to make the ADH offer a tad more complex.
Not that he’s been seen on the ADH network since being accused of indecent assault a year ago. But he’s still the notional face of the enterprise (and that’s despite being charged with 26 historical offences against young men, which his lawyers say he will defend).
Will any of it have a bearing on ADH’s play for the regional TV assets? Who are we to say?
But if there’s one truth about the SCA board it’s that even when the directors are thrown a lifeline, they always seem to find a way of throwing it back. YB
Pressed for interest
The National Press Club is literally giving away seats to Tuesday’s showdown debate between opposition housing spokesman Michael Sukkar and the Greens’ Max Chandler-Mather.
This happens occasionally; a corporate table needs filling and a few last-minute spots become available. But that’s not quite what we’re talking about.
We speak of the debate that the actual Housing Minister, Clare O’Neil, was invited to attend but which she spinelessly chickened out of participating in, as we reported a week ago.
Facing the prospect of a near-empty room, the NPC dispatched an email on Friday trying to lure a few more people to its Barton location.
“Thirty free of charge places are available,” the email said. Thirty! We’re stumped as to the lack of interest.
Is it the lack of any lunch being provided? Is it the topic of the debate itself?
Surely it isn’t the spectacular talent on offer …? YB
Curious links
As ASIC’s investigators trawl through the wreckage of David McWilliams’ ALAMMC Developments, curious links appear with fellow NDIS property developer Saorsa Health.
Margin Call isn’t aware of any direct relationship between McWilliams and Saorsa boss Aiden Garrison – last seen in London trying to stitch up new funding for his teetering property empire, which has raised more than $45m from investors on the promise of 45 per cent returns.
But Saorsa investors, now worried whether they’ll see a dime of their money back, have spotted a few other links between the two property groups.
The first is that both appear to have raised money against the same Townsville property. Information memorandums distributed for both investments show different street addresses. But a quick glance at a map shows it’s a corner block and, in fact, the same place.
Saorsa was looking for $4m, and ALAMMC was chasing $3.3m. Garrison didn’t respond to Margin Call’s query on the subject.
The ALAMMC fund is in court-ordered liquidation, so any problems with the title will presumably be spotted by BDO’s Andrew Fielding and Helen Newman.
The second link? Pretty much all of $45m or so raised for Saorsa developments came in through Sydney-based broker Mountain Assets, and predecessor Armada Assets. The same mob raised the bulk of the cash for ALAMMC projects, we’re told.
Mountain claims to have raised more than $160m from investors across 30 projects, with more than $30m paid out in interest and redemptions
Aggrieved investors say Mountain brokers recently admitted on a call they were taking a 15 per cent commission from the money they raised.
Margin Call ran this figure past founding Mountain Assets partner James Gardner, who wouldn’t confirm or deny it. The call was “not for public discussion”, he said. He didn’t consent to any tidbit from the call being passed on to Margin Call, the broker’s fees were commercial in confidence, and “any figure quoted is rank speculation”.
But if that’s the clip on the ticket, those developments would need to deliver a 70 per cent return to pay out as promised – you wonder why that wouldn’t raise a few concerns among finance professionals.
Still, Gardner tells Margin Call one development it backed in Queensland has already paid back investors, and four more – in NSW and Victoria – are on track to do the same.
As for Saorsa’s woes, they’re not Mountain’s fault, or anything to do with Mountain’s fees.
Rather, operational issues lie directly at the feet of Garrison, he said, and Mountain is still working quietly in the background with “a negotiation team in the UK” to support a rescue plan.
We look forward to learning what it is. NE
Disharmony in Milgrom family over Climate 200 backing
Sussan Group owner Naomi Milgrom has distanced herself from the investment company run by her three children that has poured money into Simon Homes a Court’s Climate 200 movement.
Cranbrook old boys clash over Luxe Listings deal
A court stoush featuring two private school boys, a hit TV show and an old gangster? Throw in some fast cars and rhyming slang and you’ve surely got the makings of a major movie.