NZME board nominee Jim Grenon owns 9.97% of the media company.
The businessman seeking to lead a new-look board of media company NZME has hit back at a vocal shareholder, saying that in his view he now qualifies as a “flake”, following the shareholder’s about-face in withdrawing support for the businessman’s position.
And Jim Grenon has rejected an assertion from Australian shareholder and analyst Roger Colman that Grenon and his board nominees do not have the experience or skills to run the media company, which owns the NZ Herald, Newstalk ZB, OneRoof and other brands.
He has also pushed back at Colman’s concerns about a lack of public and social media information about Grenon and his family’s business background.
“Because someone has shied away from the public eye and does not like social media is not a character flaw to me,” Grenon told the Herald. “Nor can you rely on information obtained that way for the questions that are important here.”
In an update to his clients and investor contacts this week, Colman said Grenon’s team “has never had any relevant media experience, no digital classifieds experience, zip, zero. And only a sliver of Australasian public company experience.”
Colman headlined his update with the line “Voting for the Grenon team is dangerous for NZME’s future” and said the company should not be “run by media and classifieds portals amateurs”.
He said he would no longer vote for Grenon, or support his other nominees, for board positions.
Grenon hit back at Colman in an email response on Tuesday evening to Herald questions.
“Roger is all over the map and now qualifies as what we call at my company, TOM Capital, a flake,” said Grenon.
“He thinks he knows things about me from snippets on the internet or reporters/public figures who know nothing about me, but think they should offer their opinion nonetheless.
“I think it is fair to say those are people who favour the status quo. The key thing with the TOM flake rule is that, once a person has been so labelled, it is best to just not deal with them, at all, on anything.”
Grenon said he first talked to Colman in early March and sent him the first of his letters to shareholders.
“He called back in about 10 minutes to say he was in favour of the whole plan.
“A few days later he sent an email confirming he was backtracking on my three nominees (which is also confirmation he had said he supported them). I understood from a conversation with Roger that backtracking meant he was 50% on them, but he still supported me.
“That email also said it would be best if all the current directors go.
“Since then, he has steadfastly supported me for a seat, while deciding my nominees didn’t cut it and, even if I did have another 27% indicative support, that wasn’t worth another seat, as far as he (with his less than 3%) was concerned.
“Now it’s no seat for me either, according to this [latest advisory], but Roger told me he was still in favour when he last called just a few days ago.”
Grenon provided a redacted copy of the email that Colman had sent him in March. In it, Colman supports Grenon for a board position and says he is willing to fly to New Zealand to meet his three nominees.
Colman further says in the email that he supports chief executive Michael Boggs for a board position as well as OneRoof advisory board member Nigel Jeffries. Colman makes the comment in the email: “I hope your team can possibly get better outcomes in costs and revenues/yields”.
Colman said in his advisory that Grenon – who established private equity firm TOM Capital in Canada in 1995 – would be “learning on the job, with 1200 people who take their talent with them down the lift every day”.
“NZME is completely different to the Grenon family group hard assets operations defined by the TOM Capital website, which is US/Canadian real estate, Raywal Cabinets and the Foremost equipment production. It’s not enough to say one can hire the talent. You have to live it and love it.”
Grenon said he would respond later and more fully to those specific comments by Colman.
“But three of my companies are quite employee intensive, with well over 1000 people. Does it matter if they go up and down the elevator or just drive out of the parking lot every day?”
He said the board “can’t know all the details of the new things that are developed or the equipment that is purchased”.
“The earnings of these companies are more than three times the earnings of NZME. And there are other companies doing things that are relevant to what is happening at NZME, for instance, designing and selliing a subscription service to interact and perform functions over the internet. That was over a 10-year project that was very successful and a newer version continues.”
Grenon said he had extensive public company experience, which he would outline at another time.
“None of the public company entities will show up under a TOM Capital search.”
Colman said in his advisory he hoped New Zealanders increased their shareholding in NZME, recognising it “as a vehicle which holds a central position in the New Zealand democracy”.
“The Grenon team have no record of leading media, classifieds vertical portals at all. They have relationships with Phil Crump’s Cranmer’s Substack with c.5300 subscribers, and a previous associate of James Grenon, The Centrist. Read as you like,” Colman said.
“One wouldn’t want this journalism to become central to the New Zealand Herald as ... print or online [circulations] may suffer. The NZ Herald is already centre in a left versus right chart released by NZME.”
Grenon said most people in New Zealand had an opinion of their own on this matter “and don’t just cite NZME’s view of it”.
“I don’t know how much actual exposure to the NZ news ecosystem Roger actually has. The issue isn’t just left/right. It is also quality.
“My proposed other board members also have skills/experience, even if Roger feels otherwise.
“Also, I just disagree that these businesses are so hard and the current board is so involved that the businesses will immediately suffer. While they will all get attention, it is only the publishing that needs TLC right out of the gate.”
Colman said in his advisory that Grenon’s plans to dig into the cost base, “when he is yet to understand the functions, doesn’t seem a good idea and [would be] best left to an outside consultant or bolstered CFO line-by-line look”.
Grenon said: “This just shows Roger doesn’t know how to actually determine if things are run cost-effectively.”
On Colman’s further comment that the Government should restrict any maximum shareholding in NZME to 20%, Grenon said: “Thanks for your take on it, Roger, but not relevant to what is actually happening.”
Grenon and his team are confident they will win support for their proposed board changes at NZME’s annual shareholders’ meeting in June.
Grenon owns 9.97% of NZME – his shareholding, plus the support of NZME’s biggest shareholder, Spheria Asset Management, as well as other investors including Caniwi Capital, have given him a base support of 37%.
Colman, meanwhile, holds just under 3% of NZME through leveraged equities and his superannuation fund. Another almost 10% of shares are held by friends and former clients who are likely to follow his lead.
Grenon confirmed Colman’s earlier support was among the “extra 10%” that moved his shareholder support from 37% to 47%.
“Nothing has changed about the 37% and there are others to add to that but I am not going to venture an updated guess.”
Grenon’s confidence of having the numbers is also based on his analysis of how many shareholders voted at last year’s annual shareholders’ meeting.
Spheria Asset Management portfolio manager Matt Booker told the Herald yesterday that Colman was “of course, entitled to his opinion – and to change it, as he appears to do quite frequently”.
“While we are unsure how much stock he represents, like us, he is entitled to vote in whichever way he believes best serves his interests as a shareholder of NZME,” Booker said.
“We have had minimal contact with Mr Colman and are therefore surprised by the assertions he has made regarding our voting intentions.
“To clarify, we have not made any commitments to Mr Grenon. However, we have indicated our intention to support his nominations, as we currently believe they align with the best interests of our clients.
“That said, we reserve the right to reassess our position as developments unfold and we continue to follow Mr Grenon’s proposed board-reshaping with interest.”
Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME.
First look: Eye-catching new police ads to extend to train and rail network.