The Takeovers Panel has introduced a phased lifting of voting restrictions on ARN Media’s 6.83% stake in Southern Cross Media, allowing incremental voting rights restoration starting July 2025 amid a contested board spill.
- Panel varies previous orders restricting ARN Media’s voting rights
- Voting restrictions to lift progressively every six months from July 2025
- Sandon Capital seeks to use shares to vote on board spill resolutions
- Restrictions tied to ‘creep rule’ allowing incremental voting power increase
- Panel declines immediate full lifting but allows prospective easing
Background to the Voting Restrictions
Southern Cross Media Group Limited (ASX – SXL) has been under a cloud of shareholder voting restrictions since early 2024, when the Takeovers Panel imposed orders limiting ARN Media Limited’s ability to vote its 6.83% shareholding. These restrictions were designed to curb potential control shifts and protect the company’s governance stability.
Sandon Capital’s Push for Board Changes
Fast forward to May 2025, Sandon Capital Pty Ltd, a significant shareholder, delivered formal notices signaling its intent to move resolutions at Southern Cross Media’s upcoming general meeting. These resolutions aim to remove four directors, including Heith Mackay-Cruise and Ido Leffler, marking a clear challenge to the current board’s composition.
Panel’s Response – A Phased Easing
In response to Sandon’s request to lift voting restrictions on ARN Media’s shares for the board spill vote, the Takeovers Panel declined an immediate full removal of restrictions. Instead, it introduced a novel, phased approach – starting 1 July 2025, the restrictions will ease incrementally every six months, allowing ARN to regain voting rights on a portion of its shares aligned with the so-called 'creep rule'. This rule permits a gradual increase in voting power, reflecting a cautious balance between shareholder rights and market stability.
Implications for Southern Cross Media’s Governance
This measured easing means ARN Media will progressively regain influence over Southern Cross Media’s decisions, potentially impacting future board compositions and strategic directions. However, the Panel’s decision also signals its intent to maintain oversight and prevent abrupt control shifts, preserving orderly governance.
Looking Ahead
The Panel’s reasons for this decision will be published in due course, but for now, the market must watch closely how these incremental voting rights affect shareholder dynamics at Southern Cross Media’s next general meeting and beyond.
Bottom Line?
The phased lifting of voting restrictions sets the stage for evolving control dynamics at Southern Cross Media.
Questions in the middle?
- How will ARN Media’s incremental voting power influence the upcoming board spill vote?
- Could Sandon Capital’s push trigger further regulatory scrutiny or Panel interventions?
- What are the long-term implications of the ‘creep rule’ application on Southern Cross Media’s control?