Activist involvement over at $NZM.AX looks intriguing, with potential upside of around 50%+ NZM is a major force in New Zealand’s media landscape. The company owns about 50% of the newspaper market (anchored by The New Zealand Herald), holds 40% share in the radio market, and owns OneRoof, the country’s 2nd/3rd largest real estate classifieds site. The company has been poorly managed for years, with the stock trading at a steep discount to its underlying asset value. Back in February, NZME launched a strategic review of its classifieds business, OneRoof. Shortly after, billionaire activist Jim Grenon quickly built a 13.5% stake and initiated a proxy fight to replace the board. In May, the parties reached a settlement agreement, resulting in Grenon securing a board seat, along with the appointment of a new chairman approved by him. This leadership shift, combined with the ongoing strategic review, makes it increasingly likely that we’ll see a monetisation of the OneRoof business. SOTP valuation breaks down as follows: - 6x EBITDA for the profitable, dominant publishing business - 4x EBITDA for the Audio segment (in line with comps) - 3x sales for OneRoof’s digital business - 1x sales for OneRoof's print magazine business The OneRoof valuation appears especially conservative, given where most classifieds businesses trade. Grenon’s assumptions value OneRoof at 5x sales for its digital operations and 1x for print. Overall, fair value is somewhere between A$1.50 and A$1.66/share, compared to the current share price of A$1.04. While we wait for a resolution, investors can collect an 8–9% dividend yield.