A fight has has broken out between shareholders of SCA and the board of directors of the broadcaster.
At the centre of the stoush is a $330 million bid by competitor ARN Media and fund manager Anchorage Capital Partners to takeover SCA.
Shareholders representing about a quarter of the share capital of SCA reportedly want to current board out and the deal, proposed by ARN back in October, to go ahead.
They say the "protracted negotiations" put the offer at risk.
Spheria Asset Management has reportedly said it would call for an extraordinary general meeting, with fellow shareholders Allan Gray and Ubique Asset Management, to remove the board.
The board of directors is fighting back.
"The SCA board respects the rights of shareholders to call an extraordinary general meeting and will fully comply with its legal obligations," the directors said today in a statement to the ASX.
"However, given the work completed to date, the SCA board considers that it would not be in the interests of SCA shareholders for such a meeting to be called before finalisation of the SCA board’s consideration of the (ARN) indicative proposal.
"The board reiterates its commitment to act in the interests of all shareholders and will keep the market informed in line with its continuous disclosure obligations."
The directors say the board and management are constructively engaged in evaluating the proposal, including SCA has providing financial and commercial due diligence information.
However, the board highlights that almost 70% of the value to SCA shareholders is represented by ARN shares to be issued to SCA shareholders in a new company.
"The value of the shares in ARN NewCo will be fundamentally different to the value of ARN shares before implementation of the indicative proposal and the current or historical trading price of ARN shares," the board of directors said.
"It is therefore critical for the SCA board to value the ARN NewCo shares to properly assess the indicative proposal.
"The SCA Board has requested but has not yet received the financial and commercial due diligence information it requires to complete that assessment.
"SCA is well advanced in its due diligence; however, the SCA board will not be able to finalise its due diligence and evaluation of the indicative proposal unless the consortium provides this critical information."
SCA this week announced its December half results, reporting costing cutting in response to a "challenging" advertising market. The company reported revenue down 2.9% to $252.6 million for the half year to December and net profit after tax at $4.4 million, a drop of 71.1%.
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