Three of Southern Cross Austereo’s largest shareholders are looking to remove the company’s board and management as they continue to drag their feet on the ARN takeover bid.

Spheria Asset Management, Allan Gray, and Ubique Asset Management, who hold over a quarter of SCA shares between them, indicated plans to call an extraordinary general meeting after a lucklustre first-half financial result was posted yesterday.

“We are calling the EGM to replace the board of directors,” Spheria co-founder Matthew Booker said, according to the AFR.

“We believe the transaction presented by ARN/Anchorage is in the best interests of shareholders and the protracted negotiations risk the deal not eventuating, leaving the business with a stretched balance sheet in a challenging macroeconomic environment.

“The company has had an appalling track record of meeting expectations hence its abysmal share price performance over a number of years. In our opinion, this will continue without shareholder intervention.”

SCA chief John Kelly used strong language regarding the offer in his update to market yesterday.

“Implementation of the proposal would require separation of highly integrated radio, and other, assets of both SCA and ARN and reallocation of those assets to members of the consortium and to a new digital joint venture”, he said, a process that would involve “significant structural challenges, additional costs and operational financial and tax complexities”.

Kelly told Mumbrella he didn’t believe the value of LiSTNR has “been factored in appropriately” to the current deal.

“I appreciate that the headline of our results today is difficult, as it is for other media, given the market conditions,” he said.

“What we’re trying to say, is all the work we have done in the six months really positions us well, no matter what the market conditions are, moving forward.

“So really, I think we have built significant value, which by its very nature, given that the offer came on the 18th of October, I don’t think it’s been fully appreciated by the market.”

Spheria Asset Management, Allan Gray, and Ubique Asset Management don’t agree. ARN will no doubt throw their 14.8% vote behind the removal, too.

“We are strongly supportive of a merger between ARN and Southern Cross and urge the boards and management teams of both companies to work furiously towards this end,” Allan Gray managing director Simon Mawhinney said of the move toward an EGM.

“Following today’s results announcement from Southern Cross, we are concerned that Southern Cross is not so inclined, which is an unacceptable outcome to us.

“Under this scenario, we would be left with no choice but to support efforts to remove Southern Cross directors and, ultimately, management.”