SCA says Sandon's intention to spill board is a 'considerable distraction'
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The news: Southern Cross Media has described notices from Sandon Capital detailing its intention to spill the board as a “considerable distraction” and an “unnecessary cost”.
The context: The notices were made on behalf of Sandon's investors One Fund Services and One Managed Investment funds, which own more than 5% of SCA shares.
The investors are looking to remove chair Heith Mackay-Cruise and independent directors Ido Leffler, Carole Campbell and Marina Go.
SCA noted that it had not received any notices requiring it to call a general meeting to consider the resolutions or to put such resolutions to a general meeting. It also said it had not received notice of any proposed directors to the board.
SCA said its major shareholders — Throney Investment Group (and Associates), Spheria Asset Management and Ubique Asset Management — which represent more than 50% of voting capital, were supportive of the current board and intended to vote against any resolutions to spill the board.
Sandon said the company is trading at a substantial discount of its intrinsic value estimate and its full value can only be realised if there are board and management changes.
SCA’s share price last closed at 71 cents and over the past 12 months has fallen 17.44%. SCA noted that Sandon acquired its initial interest in the company at 51 cents in October 2024.
According to Sandon’s notice to SCA, it was disappointed in the board’s decision to resume the payment of dividends while facing an uncertain outlook and that the directors had proceeded with an incentive scheme that had unrealistic share price targets.
What they said: “SCA considers the resolutions being proposed by Sandon are a considerable distraction and unnecessary cost to SCA,” SCA said.
“Given the limited prospects of success, including having regard to the position of Shareholders representing more than 50% of SCA’s voting capital, SCA strongly encourages Sandon to withdraw the section 203D notice and confirm it will take no further steps to move the proposed resolutions without further delay.”
In Sandon’s notice to SCA it said: “We are stunned that the Board has decided to resume payment of dividends, especially in light of the uncertain outlook provided with yesterday’s trading update”.
“... We consider the decision to resume dividends to be a purely defensive move by the Board; read in the context of our discussions regarding the need for changes at Board level. This decision appears to be an attempt by the Board to placate shareholders. We are confident most shareholders will see this decision for what we consider it to be – an ill-advised and short-sighted attempt at “selfpreservation,” it said.
The sources: ASX, Sandon Capital notice to SCA
