Stuff sale on agenda, says new owner Nine

Wednesday, 12 December 2018

Nine boss Hugh Marks has indicated it would take the top price for Stuff.

A sale of Stuff Ltd is 'on the agenda' of its new owner, Nine chief executive Hugh Marks has confirmed.

Australian television company Nine acquired Stuff, publisher of the Stuff website and newspapers including The Sunday Star-Times, The Dominion Post and The Press, last week as a result of its takeover of fellow Australian media business Fairfax Media.

Fairfax had owned the New Zealand business since 2003.

Stuff in August reported a 27 per cent fall in its operating profit to $41m for the year to June 25.

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Fairfax withdrew $32.5m in cash from Stuff prior to the Nine merger, but Nine says funding for all its businesses is managed centrally and it has the capacity to invest in growth initiatives, including in New Zealand.

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Marks indicated Nine anticipated selling Stuff to the highest bidder.

The entity willing to pay the most for Stuff was also likely to be the best owner for the business as it was likely to be the owner most aligned to its business goals, he said.

Stuff chief executive Sinead Boucher said Stuff was in really good shape and was continuing to build a collection of new businesses and products that leveraged 'the scale and trust' built through its newspapers and digital properties.

'We end this year with Stuff as the biggest domestic site and Neighbourly growing very rapidly as a local social network. Both provide great news and services to New Zealanders,' she said.

'Given its scale, reaching more than a million New Zealanders a day, we have been able to position Stuff as a domestic alternative – and one based on a strong ethical framework – to the multinational platforms for other publishers and businesses to use as a channel to reach their customers.'

Stuff chief executive Sinead Boucher expected it would continue on the path of investing in new businesses next year.

Stuff had been investing in developing and growing new businesses such as Neighbourly, internet provider Stuff Fibre and electricity joint venture EnergyClubNZ, and expected to 'continue on that path next year', she said.

Stuff's net loss after write-downs for the year to the end of June was $74m, according to accounts filed with the Companies Office.

Those accounts showed Fairfax took a $22.5m dividend from Stuff in the year to the end of June, and a further $10m dividend in September, after the close of its financial year.

Stuff had held just under $11m in cash at the end of June, prior to the second dividend payment.

A Nine spokeswoman said Nine had put bridging finance in place, which included the ability to draw in New Zealand dollars.

'Funding for all group businesses, including Stuff, are managed centrally,' she said.

'The merged group is well-financed, with plenty of capacity to invest in growth initiatives, including in New Zealand.'

Fellow Kiwi media company MediaWorks, owner of television channel Three, has meanwhile finalised the terms of its takeover of the New Zealand arm of Australian-based outdoor advertising business QMS.

The non-cash transaction will see MediaWorks' United States owner Oaktree Capital reduce its stake in MediaWorks from 100 per cent to 60 per cent, with Melbourne-based QMS acquiring a 40 per cent stake in the merged New Zealand firm.