By RNZ News
NZME is insisting a deal for it to purchase media rival Stuff is still on the cards, despite Stuff’s owner saying it has wrapped up talks with no deal.
Stuff and NZME are seeking leave to appeal the High Court decision blocking their merger.
NZME said today it was asking the government to allow it to buy Stuff for a nominal $1.
Stuff’s owner, Australia’s Nine Entertainment, responded that it had terminated talks with NZME over a purchase plan last week and no deal was in place.
In the latest twist, NZME has since told the NZX that it believed it was still in a “binding exclusive negotiation period with Nine and does not accept that exclusivity has been validly terminated.”
– Partner –
Stuff chief executive Sinead Boucher told staff this morning the announcement by NZME came as a surprise.
“There is no deal between NZME and Nine.
Clear no transaction message
“We are really not sure why NZME took this step, given the clear message from our owners that there would be no transaction.”
She said she would get more information and share it during the day.
In its initial announcement this morning, NZME said it was seeking Commerce Commission approval and special legislation from the government by the end of the month to purchase Stuff.
The commission has previously declined clearance for a merger of the two companies, saying it would substantially lessen competition, both for advertisers and readers. That decision was subsequently upheld by the High Court and the Court of Appeal.
NZME said in this morning’s market announcement the acquisition of Stuff would lower the costs of producing news, and ensure a committed local news media outlet into the future.
NZME believed the New Zealand media sector was too small for the current number of quality participants, the statement said.
“Consolidation is urgent in the face of dramatically declining advertising revenue and current general economic conditions.
NZME thinks it is ‘best owner’
“NZME continues to believe that it is the best owner for Stuff as it is best placed to preserve mastheads, newsrooms and jobs. NZME considers that in the current New Zealand media landscape, NZME’s acquisition of Stuff will not substantially lessen competition in any market.”
Last month NZME, which owns The New Zealand Herald, regional papers and radio stations including Newstalk ZB, announced 200 jobs would go due to sliding advertising revenue amid the covid-19 downturn. It also asked the remaining staff to take a 15 percent pay cut for the next three months.
Stuff also asked its employees to take a pay cut. Stuff staff earning more than $50,000 were asked to take a 15 percent reduction, the executive team 25 percent, and chief executive Sinead Boucher cut her salary by 40 percent.
Stuff was bought by Australian-listed media group Nine Entertainment in late 2018 but has been on the sale block for months.
In November last year NZME confirmed it had been in talks with Nine about a possible purchase and had put a proposal to the government regarding a possible transaction including a “ringfence” agreement for Stuff’s editorial operations.
Between them, NZME and Stuff own most of New Zealand’s newspapers.
- This article is republished by the Pacific Media Centre under a partnership agreement with RNZ.
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Article by AsiaPacificReport.nz