Ann: Update to Shareholders, page-10

It's a challenging situation to analyse and assess.

You’re absolutely right: the board needs to change to unlock more shareholder value. NZME has valuable assets that can further enhance returns for shareholders.

Regarding Grennon, his recent emergence is quite unusual. Although he has been a private billionaire, he has now chosen to step into the public eye, which seems inconsistent with his long-term investment banking strategies. He is well-known in investment circles and has considerable influence. It's unclear why he’s making a public move like this. I’d like to believe he aims to make NZME a key part of his long-term portfolio, especially since there's not much else he is recognised for in New Zealand. He may see this as an opportunity, but whether he considers it an easy target is up for debate.

I don't have a strong opinion on the right-wing political angle; it seems minor, given that NZME is not a major global media player. If his goal was influence, he and his wealthy associates could purchase larger media voices in bigger markets.

I genuinely believe this is a play based on an undervalued opportunity—specifically, an immediate path to unlock value with OneRoof and other assets. Therefore, NZME could be an ideal candidate for an aggressive takeover. However, whether or not he intends to take it private would be a difficult proposition.

Spheria holds a 20% stake, and they would likely want to unlock value as part of a major play. Spheria wouldn't support a privatisation deal that didn’t benefit them as shareholders, which in turn would benefit all shareholders.

Investment bankers and "flippers" like Grennon may not need extensive expertise in media; the current board should have that knowledge, but they haven’t delivered strong returns so far. Grennon has experience in turnarounds and unlocking value, whether as a corporate raider or an activist investor—this remains to be seen.

Gaining control and delisting the company won't be as straightforward as he may think, especially compared to opportunities in the oil and gas sector.

I’d be more concerned, but I’m reassured by the fact that Spheria owns 20% and Pinnacle has 10.92%. 30% is held by small-cap boutique Australian fund managers who have an interest in their shareholders. Overcoming 30% of shareholder resistance is no easy task. While Grennon is increasing his shareholding, he would need the support of these larger holders to gain a vote of confidence.

He has likely presented a better plan to gain their backing, and both Spheria and Pinnacle are focused on profitability, so they are unlikely to support a privatisation at a deep discount.

A company called Osmium Partners LLC hold 6.53%, they are a San Francisco-based investment company. I dont know if they are Grennon connected.

Additionally, the Accident Compensation Corporation owns 4.5%. It’s unrealistic to expect a New Zealand crown entity to agree to Grenon’s proposal at a deep discount if it were to be taken private.

Overall, considering the presence of other shareholders with significant influence, I feel somewhat insulated from potential risks to some degree.

But it does beg the question, are we better with the devil we know or the one we don't ...