Nine will 'focus on the long term' with bids for Stuff below fair value

Tuesday, 23 July 2019

Nine Entertainment chief executive Hugh Marks, owner of Stuff, told staff that while the New Zealand business is still for sale, it has not received bids it believes represent fair value, so it is now focused on the strategy of the business.

Australian media giant Nine is now presuming it will retain Stuff after failing to attract acceptable bids for the business.

On Tuesday Nine chief executive Hugh Marks told staff that while its New Zealand business would still be held for sale in its accounts and a sales process had not been completed, he was visiting to discuss future strategy with management.

'All businesses are always for sale in our business,' Marks said in a presentation alongside Stuff chief executive Sinead Boucher.

'But we haven't received a proposal that represents the right thing for the business, either for Nine or Stuff.

* Nine says Stuff may not be sold by end of June

* 'I love going over to New Zealand': Nine prepared to run Stuff if no buyer puts hand up**

'At this point, let's stop worrying about the notion of a change in ownership, let's really start positioning ourselves for a brighter future.'

Stuff is the publisher of Stuff, and newspapers The Dominion Post, The Press and Sunday Star-Times.

Nine has been looking to sell Stuff since inheriting the business during its $4 billion merger with Fairfax Media last year.

Bidders appeared to believe that Stuff's profits would continue to slide, Marks said, something he disagreed with.

Media was changing 'at the margin' and that required media companies to change, but not fundamentally.

'All it is, is a matter of changing your commercial model to reflect what's happening to our customers.'

Nine has been looking to sell Stuff since inheriting the business during its A$4 billion (NZ$4.2 billion) merger with former owner Fairfax Media last year.

However, Marks did not have an offer the company was prepared to accept and the company did not need to sell the New Zealand business.

'There's nothing right in front of me that is going to happen, so at this point in time the right thing to do is say 'okay everybody, let's focus down on what are the right decisions for the long term benefit of the business and let's operate on that basis.'

This meant Nine would play a larger role in decision-making.

'We're going to be pretty active. Sometimes that'll be fun, sometimes not so fun. But we'll be pretty active and at the end of the day my job is to make sure businesses exist, both for the people and for the future but also for the broader company.'

The areas where Marks said attention would focus was likely to be on advertising sales.

'Any sort of models are always on the table, but for now I think there's just some hygiene and strategy on the ad sales side that should really lead to some positive differences.'

Marks told Stuff that while there had been offers for the entire business, 'we haven't received anything that we think's acceptable.'

There had been interest from bidders to buy particular parts of Stuff, but Marks said these were not given serious attention.

'I'm sort of not of a view that breaking up the business is the right way to go. I think that would be a misunderstanding about what's strong about the business itself.'

In Australia, Nine had managed to turn around the performance of the Metropolitan news business.

'The thing we need to do now for Stuff is to prove to the market that actually we can stabilise its financial performance at a profitability level.

'Once you do that, then everyone's perception of the business will change quite dramatically.'