NZME is publisher of a number of newspapers, including the New Zealand Herald, as well as operating radio stations and property platform OneRoof. Photo: RNZ
NZME's directors have fired their own shots in the war for control of the media company, saying they have concerns about a takeover bid including the risk of businessman Jim Grenon taking editorial control.
In a statement to the NZX, the Board said it was delaying its annual shareholders meeting until June and opening up nominations of other directors.
Grenon, a New Zealand resident since 2012, bought a 9.3 percent stake in NZME for just over $9 million early in March.
NZME is publisher of a number of newspapers, including the New Zealand Herald, as well as operating radio stations and property platform OneRoof.
Within days of taking the stake, Grenon had written to the company's board proposing that most of its current directors be replaced with new ones, including himself, and said the performance of the company had been disappointing and he was wanted to improve the editorial content.
NZME has now told the stockmarket it had concerns whether Grenon's proposals were in the best interests of the company and shareholders.
Jim Grenon bought a stake in NZME this year. Photo: TOM Capital Management
It went on to list its concerns as the lack of an alternative plan presented by Grenon, the risks of him "gaining editorial control", risks around a minority shareholder gaining control of the boardroom and what it said was "the risk of poor governance".
NZME said the company and board had taken legal advice and the board determined "it is appropriate and in the best interests of the company" to delay the shareholders meeting until 3 June.
"This will provide an opportunity to engage with shareholders in respect of the new information and to allow shareholders to consider such information and whether they wish to put forward any other director nominations."
NZME's statement said a new period to nominate directors would open on Monday and close on 5 May.
But the nominations received as part of the board shake-up - from Grenon's JTG4 Limited and Osmium Partners - would need to be resubmitted.
In an accompanying letter to shareholders the NZME board said it was concerned that the takeover bid was a play by Grenon to "exercise control over a newsroom, rather than anything else".
It said it was "very against the board interfering with editorial independence" and the current board believed journalists needed to be independent.
"The quality of journalism debate is very different from the choice of political leaning. With over 2 million readers, NZ Herald takes a deliberate position of being as broad as possible.
"We do this to maximise audience and revenue. We believe some supporters of Mr Grenon are motivated by supporting certain political perspectives."
It said there were examples around the world of "politically driven or high net worth individual ownership" which had resulted in financial declines for media companies.
The board's letter also hit back at criticism that it had not been performing well financially.
"The media industry both locally and globally has been in turmoil, facing major disruption from global tech companies and also a depressed economic backdrop.
"Our local competitors have felt this, and many have been in financial difficulty. Within this context, NZME has been a standout performer."
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
