NZ shareholders stand firm against Australian attempt to edge onto board of Vista Group

Wednesday, 16 October 2024

The Australian majority stakeholder in the NZX-listed global cinema software firm is not being subtle about wanting to install its people on Vista’s board.

NZX-listed cinema software company Vista Group has received critical support from its second largest shareholder, as its largest shareholder, Australia’s Potentia Capital, continues to try to install its own people on Vista’s Board.

Potentia, through its vehicle Admetus Capital, bought into Vista Group in late May, spending $92.9 million on an over 18% stake which it has since boosted to almost 20%.

Vista provides software and promotional aides to movie distributors and cinemas in over 100 countries, and has a 46% global market share of the large cinema circuit outside of China.

On October 1, Potentia asked for a special shareholders’ meeting to take place, proposing to remove chairperson Susan Peterson and global film industry expert Kirk Senior from the board and replace them with with Potentia executive Amitesh Chand, and the current chairperson of MYOB, DroneShield and Macquarie Technology Group, Peter James.

Vista Group’s second largest shareholder Fisher Funds does not support replacing the current board members.

James has since removed himself from contention but there’s no indication Admetus/Potentia has given up on installing Chand on the board of the company. However, Vista’s second largest shareholder, local firm Fisher Funds, told the NZX this morning it was against the idea.

“We remain supportive of the current Vista board and company strategy,” it said.

“With respect to the request for a special meeting, we intend to vote against all four resolutions put forward by Potentia. To be clear, we do not support the appointment of Amitesh Chand and Peter James as directors, nor do we support the removal of current directors Susan Peterson and Kirk Senior.”

Meanwhile, Potentia has a fire to fight back in Australia. The AFR this week reported that Potentia Capital partner Tim Reed would step back from the firm and no longer talking to business partner and Potentia founder Andrew Gray.

Potentia, with over $A1 billion funds under management, was founded in 2014 and bills itself as Australia and New Zealand’s only dedicated technology growth capital. Its first foray into New Zealand was in 2022, when it backed the purchase of New Zealand-based business Opmetrix by Brisbane-based Commerce Vision.

After buying into Vista Group in May this year, Potentia announced it would be setting up an office in New Zealand.

Special meeting

Potentia Capital's Amit Chand is the man the Aussies want to put on the board of Vista Group.

Back at Vista Group, and the issue of Admetus Capital trying to install its people on Vista’s board remains a live one. The special meeting to be held to vote on the proposal is yet to be scheduled.

Admetus first asked Vista to appoint three of its people to the board a month after buying into the company, a request evaluated by Vista in consultation with the New Zealand Shareholders Association, its large institutional and its founding shareholders, together representing more than half of the shares in the company.

There was no enthusiasm for the plan, including from the NZSA, which had voted in favour of the re-election of the company’s current directors just weeks before. NZSA had noted at the time that despite four consecutive losses, Vista was in a financially sound position, even while it would have to grow its revenues to keep its momentum going.

Despite most of its shareholders backing it, the Vista Board invited Potentia to propose independent director candidates to the board’s succession process, and other forms of outreach. Again, Admetus came back with a request that the Board appoint Potentia executive, Amitesh Chand, as a director, and appoint Potentia executive, Andrew Gray, as Amitesh Chand’s alternate director.

“Potentia also advised that it did not consider the Board proposed [outreach] necessary for the protection of the interests of Vista Group’s other shareholder,” Vista told the stock market.

In its most recent half year result reported in early August, Vista reported revenues of $69.6m, flat on the year prior, and a loss for the period of $2.7m, which was nevertheless a 68% improvement on the prior comparative period.

The company downgraded its revenue guidance for the current year but said margins would be stronger than expected and the company was on track to be cashflow positive.

Vista shares were trading at $3.03 this morning, having gained 113.38% over the year.