Activist investor picks directors for NZME shake-up

Australia and NZ-listed NZME owns New Zealand’s largest radio network, the One Roof website and New Zealand Herald.

A former Trademe director, a private equity executive and a lawyer who also works as a political blogger are among three of the directors lined up by a billionaire to assert change at New Zealand’s largest media company, NZME, say sources.

Former Adairs director Simon West, who was previously a director of New Zealand’s most popular classified advertising website, Trademe, is believed to be among the directors set to be nominated by James Grenon for the $200m company listed in both Australia and New Zealand.

Mr Grenon is a Canadian billionaire based in New Zealand who wants a clean-out of NZME’s board, the publisher of the country’s largest newspaper, The New Zealand Herald.

He has outlaid $NZ9m in recent weeks for his company, JTG4 Ltd, to amass a holding of about 10 per cent.

Mr West is also a former chief commercial officer at The Warehouse.

Meanwhile, lawyer Philip Crump is expected to be nominated.

Mr Crump is a member of New Zealand’s Waitangi Tribunal, a director of NZ On Air and, until July last year, was an editor of NewstalkZB Plus – the conservative talkback radio station which NZME owns.

He is described by NZME on its own NewstalkZB website as a “heavy hitting political commentator and journalist”.

He also has worked as a partner at DLA Piper as head of leveraged finance in London.

The third nominated director is understood to be Des Giddings, who works at New Zealand private equity firm Maui Capital.

It comes as tensions run high within New Zealand’s media scene after a move by Mr Grenon to buy a major stake in NZME following poor performance, and sent fear through left-leaning press outlets and political parties that he would assert editorial influence – after he was identified through reports as the publisher of right-of-centre online publications in New Zealand such as The Centrist.

Mr Grenon said that after initially having 37 per cent support for a full boardroom clean-out, he now has a total of 47 per cent of the register, NZME told the market in a March 7 statement.

Turnaround plan

NZME owns online website One Roof, the country’s leading radio network, as well as a stable of publications with more than 200,000 subscribers, including The New Zealand Herald.

The company reported one of its worst ever set of annual results, plunging to a $NZ16m loss for 2024 during challenging economic conditions and amid an aggressive cost-cutting program that’s brought about the departure of some of The New Zealand Herald’s high-profile print journalists.

DataRoom understands that Mr Grenon, who has made his fortune through company turnarounds and restructurings, has experts from his private company, Tom Capital, coming up with a plan for the business within weeks.

Some have speculated it could result in some of Australia’s most experienced media consultants being hired to provide advice.

Possible options on the table could be pulling back from plans to expand into news video streaming, a move to a digital-only publication model and more investment in top talent in editorial that would lift subscriptions at a time when advertising revenue for the mainstream media is declining.

It could also mean chief executive Michael Boggs, who raked in almost $NZ3m in annual pay in 2023 and almost $NZ2m last year, could be under pressure, along with editorial management.

But others say little will change after the boardroom refresh.

The $200m NZME is listed in both Australia and New Zealand and is the subject of a merger in 2016 between APN News and Media and The Radio Network, (formerly part of the Australian Radio Network) and eCommerce business GrabOne.

A proposal was made to merge former Fairfax media publishing assets but it was blocked by the New Zealand Commerce Commission.

However, since the deal, its share price has traded sideways as investors shun traditional media companies for growth stocks in the technology space.

The company is currently undertaking a strategic review for its online real estate business, One Roof, through Jarden and that could lead to the business being demerged or sold in the medium term to a global peer like CoStar, currently bidding for Domain Group, and likely see it rerate.

However, the understanding is that shareholders are keen to retain One Roof in the near term.

DataRoom revealed a boardroom shake-up was looming last week, with Mr Grenon to assert more control.

Hedge funds

Meanwhile, US-based hedge funds are capitalising on the action.

Osmium Partners – known to Australian investors for its activist investor play with online market place Redbubble – is piggybacking on Mr Grenon’s activism by snapping up 6.6 per cent of NZME, although is not working in concert with the billionaire.

Osmium has put forward additional nominations for the appointment of two new directors, separate to Mr Grenon’s nominations.

And New York-based hedge fund Repertoire Partners has emerged as a shareholder, which reduced its holding to 2.65 per cent from 6.7 per cent.

The four new directors, who would include Mr Grenon, would be voted upon at the annual general meeting on April 29 before a fifth director would be chosen by the board.

NZME’s largest two shareholders on the ASX are Spheria Asset Management, with 19.9 per cent and Pinnacle Investment with 11 per cent, according to Bloomberg.