Southern Cross Media's Seven West Merger Sparks a Board Removal Fight
A surprise scheme of arrangement to acquire Seven West Media triggered an activist campaign against the board, and subsequent guidance cuts confirmed the acquired assets are dragging on results.
31 Aug 2026 · 3 min read
In short
Southern Cross Media Group's surprise scheme of arrangement to acquire Seven West Media prompted activist Sandon Capital to launch a board removal campaign against the chairman and two independent directors.
FY26 guidance was cut, with revenue expected down 2.6% and underlying EBITDA down 10.7% versus previous guidance, alongside an expanded cost reduction program targeting $145-150 million in annual run-rate benefits.
Sandon Capital notes the acquired TV and Publishing divisions from Seven West Media reported declines in revenue and earnings, while the core audio business proved the least challenged traditional media outlet.
Southern Cross Media Group surprised long-time activist investor Sandon Capital with a scheme of arrangement to acquire Seven West Media, prompting Sandon to launch a board removal campaign against the chairman and two independent directors, before revenue and earnings guidance downgrades confirmed the acquired TV and publishing assets were dragging on an otherwise resilient audio business.
A surprise merger announcement despite a strong standalone result
Sandon Capital said it was unpleasantly surprised to learn SXL had entered into a scheme of arrangement to acquire Seven West Media, noting it was worth repeating comments about SXL's own results the prior month, having delivered a solid FY25 result with net profit increasing 239 percent over the depressed FY24 result, taking share in its key demographic. Spheria Asset Management said Southern Cross Media returned 18 percent including a 4 cents per share final dividend, having reinstated dividends due to significant free cash flow generation and a material reduction of debt in the second half of FY25, with the total return including a spike in the share price on the final day of the month following the merger announcement.
On the last day of the month, we were unpleasantly surprised to learn that SXL had entered into a scheme of arrangement to acquire Seven West Media Ltd. SXL delivered a solid FY25 result with net profit increasing 239% over the depressed FY24 result.
— Sandon Capital, Monthly Report, September 2025
An escalating activist campaign against the board
Sandon Capital said Southern Cross Media was among the largest positive contributors, noting that after month end, funds managed by Sandon lodged notices with SXL notifying an intention to put forward resolutions at the next general meeting to remove Chairman Heith Mackay-Cruise and independent directors Ido Leffler and Marina Go, continuing a campaign it began in late 2024 following the board's handling of the Seven West Media merger.
After month end, funds managed by Sandon Capital lodged notices with SXL notifying an intention to put forward resolutions at the next general meeting to remove Chairman, Heith Mackay-Cruise, and independent directors, Ido Leffler and Marina Go. This continued the campaign we began in late 2024.
— Sandon Capital, Monthly Report, April 2026
Guidance downgrades confirm the merger's drag
Sandon Capital said SXL announced a trading update with FY26 revenue expected to be $1,860 million to $1,870 million, down 2.6 percent versus previous guidance, and FY26 underlying EBITDA expected to be $185 million to $190 million, down 10.7 percent versus previous guidance, alongside an expanded cost reduction program expected to deliver annual run-rate benefits of $145 million to $150 million.
SXL announced a trading update with FY26 revenue expected to be $1,860-1,870 million (-2.6% vs previous guidance) and FY26 underlying EBITDA expected to be $185-190 million (-10.7% vs previous guidance). In conjunction with the trading update, SXL announced an expanded cost reduction program which is expected to deliver annual run rate benefits of $145-150 million.
— Sandon Capital, Monthly Report, June 2026
Audio proves resilient while legacy Seven West assets struggle
Sandon Capital said SXL's results demonstrated that audio remains the least challenged traditional media outlet, with the poor reputation of the former Seven West Media assets holding true, as the TV and Publishing divisions reported declines in revenue and earnings, with the company citing softer advertising markets that had been evident well before the merger was proposed, noting SXL now has new management it is monitoring.
What fund managers say they are watching next is progress of the board removal resolutions against the chairman and two independent directors, delivery of the expanded $145 million to $150 million cost reduction program's annual run-rate benefits, whether new management can turn around the struggling TV and Publishing divisions, and continued resilience in the core audio business.
Questions
Why did Sandon Capital launch a board removal campaign at Southern Cross Media Group?
Sandon Capital, an activist investor, launched a campaign to remove the chairman and two independent directors following the board's handling of the surprise scheme of arrangement to acquire Seven West Media, continuing a campaign it began in late 2024.
Why did Southern Cross Media Group cut its FY26 guidance?
Southern Cross Media Group cut FY26 guidance, with revenue expected down 2.6% and underlying EBITDA down 10.7% versus previous guidance, driven by weaker performance across its acquired TV and Publishing divisions.
Which of Southern Cross Media Group's business segments performed best?
Sandon Capital notes the core audio business remains the least challenged traditional media outlet, while the former Seven West Media TV and Publishing divisions reported declines in revenue and earnings amid softer advertising markets.
2 managers, 10 comments, with each manager's latest recorded position.
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