NZME drops Commerce Commission bid to buy rival Stuff

Tuesday, 19 May 2020

Nine Entertainment said it terminated talks with NZME last week

Media company NZME has withdrawn its application to the Commerce Commission to allow it to buy its major competitor Stuff.

The move came after a failed bid for an interim injunction to force Stuff's Australian owner Nine Entertainment back into exclusive talks over the sale of the news website.

The decision is the latest in the on-again, off-again merger negotiations. The Commerce Commission prevented the deal going ahead in 2016. Appeals to the High Court the following year and then the Court of Appeal in 2018 both failed.

In a statement to the NZX following the court decision, NZME said: 'Should there be a credible buyer for Stuff who will protect jobs, newsrooms and mastheads then NZME believes this should be positive for New Zealand media.'

Jack Hodder QC, right, counsel for NZME, arriving at Auckland's High Court last week

* Proposed media merger turns septic as NZME seeks injunction in bid to buy Stuff

* All Stuff's options still on the table after NZME's curious gambit

On Friday, NZME sought an emergency interim injunction at the High Court at Auckland to get Nine Entertainment to resume exclusive talks over a proposed merger. That application was declined on Tuesday.

In her decision, Justice Sarah Katz said the proceedings were at an early stage and she was not required to decide which side was right.

'Rather, my role was to decide whether it would be in the overall interests of justice to make the interim orders sought by NZME, prior to final determination of the issues at trial.'

In a statement to the NZX following the court's decision, NZME confirmed it had advised the Commerce Commission that NZME Holdings Limited had withdrawn its clearance application.

It said: 'NZME is disappointed but respects the Court’s decision. Should there be a credible buyer for Stuff who will protect jobs, newsrooms and mastheads then NZME believes this should be positive for New Zealand media.

'However, if this is not the case then NZME continues to believe that it would be best placed to sustain and support Stuff’s mastheads, newsrooms and jobs in the interests of maintaining a robust fourth estate and plurality of voice in New Zealand.'

Stuff's owner Nine was upbeat about the court's decision.

“We welcome today’s decision and continue to operate Stuff and work for the best outcome for our audience, our people and the wider business,” said a Nine spokesperson.

Friday's court action came after Nine turned its back on NZME negations because of the inevitable political and regulatory battle that would need to be fought if the merger was to go ahead.

NZME, which owns various radio stations and mastheads including the New Zealand Herald, argued Nine had breached an exclusive agreement to explore the possibility of buying Stuff.

Acting for Nine Entertainment, John Dixon QC, said there had since been a radical change in circumstances.

That change in circumstances saw NZME barred from having access to Stuff's accounts and other data.

The move to seek an interim injunction followed NZME making an announcement last week to the NZX, saying it planned to buy Stuff for $1.

Dixon told the court on Friday the announcement was 'utterly unnecessary' and was designed to 'hurt its competitor'.

NZME said in a statement on May 11 that it was still in 'a binding exclusive negotiation period' with Nine for the purchase of Stuff.

Later, NZME issued a further statement to the exchange, noting Nine's position but also stating it believed it was still negotiating to buy Stuff.

At the same time as it reiterated its buying intentions for Stuff, NZME put in a fresh request to the Commerce Commission to allow it to buy Stuff.