It is noteworthy that 17 per cent of shareholders voted against West being re-elected to the board at its 2024 annual meeting, including Australia’s massive sovereign fund, the Future Fund, which also voted against Nine’s remuneration report. While the protest vote allowed West to comfortably retain her board seat, it revealed the level of disquiet among investors.
Nine Entertainment chief executive Matt Stanton.Credit: Max Mason-Hubers
While West and Costello sat in the chair at various times during Nine’s tumultuous times in 2024, Tonagh will take charge at a time when Nine’s largest shareholder, Bermudan-based billionaire Bruce Gordon, is limbering up to flex his ownership muscle.
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He is already the largest shareholder with a stake of 19.9 per cent, but also owns some particular derivative securities known as swaps, which can be converted to shares, that give him an economic interest in Nine of 25 per cent.
There has already been speculation that Gordon, a long-term investor in Nine, has looked at a full takeover. However, he is considered more likely to use the creep provisions that allow him to buy 3 per cent of the shares every six months.
While Gordon currently has only one representative on the board, WIN managing director Andrew Lancaster, it seems inevitable he will push to have another representative on the board. And he will most likely get his wish.
The elevation of Tonagh to the chair would have needed the support of WIN. And if Gordon continues to increase his stake, he will probably take a more active interest in Nine’s strategy.
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Nine this year sold its 60 per cent stake in real estate portal Domain for around $3 billion, of which Nine pocketed $1.4 billion. Around half of that windfall has been delivered to shareholders via a special dividend.
So Nine is cashed up and analysts say primed to look at acquisitions. On the flipside, there is ongoing speculation that Nine could sell its national radio network, which would narrow its focus on broadcasting (the Nine network and streaming business Stan) and its extensive publishing interests including The Sydney Morning Herald, The Age and the Australian Financial Review.
Gordon and WIN will be taking a very keen interest in what Nine does next once the team of Stanton and Tonagh gets going.
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