Shareholder activists are promising to enliven news publisher NZME's annual meeting on June 11, with one accusing it of a "sleep-walking management style".
One motion seeks the company's break-up to release value, another calls for a focus on paying dividends and the third seeks shareholder approval for any bid for rival publisher Stuff if total bid costs exceed $1 million.
Directors are opposing all three motions at a meeting where chairman Peter Cullinane, a former international marketing executive and founder of high-end dairy company Lewis Road Creamery, and former ASB chief executive Barbara Chapman, both face re-election.
NZME released its notice of meeting yesterday, one day after surprising both the New Zealand government and Stuff's Australian owner, Nine Entertainment, by seeking urgent legislation to overturn regulatory decisions that have thwarted the ambitions of the Auckland-based publisher of the New Zealand Herald to create a nationally dominant news business.
Shareholders Neil Parker and Howard Zingel are proposing three resolutions between them. Both have ties to the New Zealand Shareholders Association and Zingel owns 0.5 per cent of the company, telling BusinessDesk last night that he had "taken a bit of a bath" while selling down from a 1 per cent holding in recent weeks.
Parker's resolutions asks directors to "instigate a plan to break up the company so as to realise the commercial values of masthead brands and encourage an ethos of shareholder wealth creation" and to "acknowledge the importance of dividend income to shareholders."
In an explanatory note, he suggests that NZME has lost its focus on profitability and asks whether Cullinane "would be more comfortable working outside the private sector" if he "can't focus on profit."
Zingel's resolution asks directors to "obtain the approval of shareholders before they proceed with any action (costing more than $1 million, including legal fees) to acquire Stuff."
In response to Parker, Cullinane notes that "your board comprises three former CEOs of an advertising agency, a bank and a media company, a former co-head of investment banking and former partner of a 'big four' accounting firm."
"NZME does not believe that breaking up and selling NZME's media interests piecemeal would achieve a return ... that fairly represents the value inherent in the NZME business."
To Zingel's resolution, which suggests NZME's forays into online products "lack passion and urgency", Cullinane says the company will seek approvals where required to, but that doing so "where it is not strictly required lengthens the process significantly" and can be costly.
It was "not always in the best interests of the company" to seek such a vote, "particularly in situations where opportunities arise quickly."
NZME's share price has slipped 53 per cent during the past year to close yesterday at 26.5 cents and has been as low as 17 cents in recent weeks. The share price bounced earlier this week on news that it was approaching the government about the Stuff merger, even though Nine immediately informed the ASX that it had broken off talks with NZME on a Stuff sale last week.
NZME told Broadcasting Minister Kris Faafoi in a letter on Monday morning, noting the correspondence in a statement to the NZX where the publisher has been listed since 2016, that it was willing to buy the ailing Stuff stable of newspapers and national news website for $1. However, it needed legislation to overturn the 2017 decision of the Commerce Commission to disallow a deal the regulator said would lessen 'media plurality', which it said was important to a vigorous independent news media in a liberal democracy such as New Zealand.
Zingel notes that the price tag NZME offered for Stuff in 2016 - $55 million and 136 million NZME shares - "would by itself equal the market capitalisation of Stuff and NZME" today.
Extensive soundings in the Beehive yesterday suggest ministers and their advisers are bewildered by the NZME urgent legislation ploy, which appeared out of the blue in a high-stakes political week where the government was preparing to announce both the easing of covid-19 lockdown restrictions and a Budget rewritten in response to the global pandemic's impact on the economy.
Stuff and NZME revenues have plunged as advertising all but dried up during the five-week national lockdown, seriously denting businesses whose profitability has been declining steeply for years.
Close observers, including other would-be bidders for the Stuff assets, described the outward appearance of the approach to BusinessDesk as "untidy" and difficult to interpret.
Other Stuff bidders
A variety of possible bidders other than NZME are circling both the Stuff assets and the magazine assets closed and offered for sale last month by Bauer Media.
These include a range of printing companies, for whom newspapers and magazines provide staple work for printing machines, former publishing executives, and possibly Australian private equity firm, Anacacia Capital, which National Business Review publisher Todd Scott has claimed is backing him in a bid for Stuff. Anacacia has declined to comment.
Scott completed a management buyout of NBR last month after its previous owner, Barry Colman, threatened to appoint receivers when Scott initially declared he was unable to make an instalment payment to Colman dating from a buyout agreement that had been running since 2012.
In a post to several social media platforms, Scott described Colman as having "called in his chips, as was his right to do so in the management buyout agreement, if he was concerned about how I ran the company."
His management buyout of the company was now complete.
Heatley wants Bauer?
BusinessDesk understands a front-running bidder for the Bauer titles, including The Listener, NZ Woman's Weekly, Metro and North & South, is the magazines' printer, Webstar, with backing from multi-millionaire Craig Heatley.
However, the process is moving more slowly than anticipated, with parties to the sale process saying accounting firm EY, which is handling negotiations, has extended the deadline for bids to May 29.