SCA to be hit with ‘first strike’ at AGM

The move is another blow for SCA, and could imperil its bid to offload its regional TV assets, a transaction necessary to reduce costs.

Southern Cross Austereo chair Heith Mackay-Cruise.

Southern Cross Media Group will face a “first strike” against the company’s ­remuneration report at Monday’s annual general meeting, plunging the organisation into a fresh crisis as it seeks to push ahead with the sale of its regional TV assets.

Major shareholders ARN and Spheria Asset Management – which own 28.14 per cent of SCA between them – will join forces in a protest vote to deliver the “first strike”, placing more pressure on SCA chairman Heith Mackay-Cruise and chief executive officer John Kelly.

The move is yet another blow for SCA, and could imperil its bid to offload its regional TV ­assets, a transaction necessary to reduce the company’s cost base and one which the media outfit pledged in August would be finalised before Christmas.

Earlier this month, The Australian reported that the struggle to offload its regional assets was discussed at an unscheduled SCA board meeting, after negotiations with potential buyers Seven West Media and Network 10 stalled.

In a statement to the ASX in late October, SCA said it continued to “actively progress with the sale of its regional television ­assets”. “SCA will update shareholders on the progress of these negotiations in accordance with its continuous disclosure obligations,” it said.

It has since emerged that ADH TV, the conservative broadcaster backed by Alan Jones, is keen on expanding its footprint and is in the market to vie for the regional assets. However, nothing has been signed and it’s understood that the most likely outcome is that the ­assets could be split between two bidders, perhaps ADH and Network 10.

On Saturday, The Weekend Australian reported the SCA board had 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 close of 54.5c.

It is understood major shareholders are furious that such ­opportunities to reduce the company’s debt were passed over, particularly as its share price has been on a steady downward spiral for more than year.

ARN Media and Anchorage Capital Partners put forward a cash-and-scrip takeover bid 13 months ago, valuing the company at 94c a share. It was ultimately withdrawn after a drawn-out negotiation.

In May this year, Mr Mackay-Cruise – who took on the role of chairman in March after the sudden exit of Rob Murray – lashed out at the failed takeover.

“It is frustrating that the consortium has now withdrawn its proposal in circumstances where any potential material concerns should have been identified much earlier in the process,” he said in a statement.

“We remain open to considering proposals that would deliver fair value and be in the best interests of all SCA shareholders.”

SCA has 99 radio stations, ­including LiSTNR, the Hit Network and Triple M stations, as well as its suite of regional TV assets across Central Australia, and in the regional areas of the eastern states.

ARN Media owns 58 radio stations, including Gold and KIIS FM, home to The Kyle And Jackie O Show, which extended its reach into Melbourne in April – an ­experiment that is yet to pay ­dividends.

In August, SCA reported a 1 per cent decline in revenue in the 2024 financial year, for $499.4m.

“The sale of our regional television assets will enable us to focus on optimising our leading radio and digital audio assets, led by LiSTNR, Hit and Triple M,” he said at the time.

Representatives from SCA and ARN declined to comment when approached by The Australian.

Seven, Network 10 and ADH TV also declined to discuss their interest in SCA assets.