NZME and Fairfax Media’s Stuff will not appeal rejected merger decision
The attempt to merge Fairfax Media’s New Zealand arm Stuff with NZME Limited has come to an end, the company has announced.
In a notice on the ASX this morning, Fairfax Media said it would not appeal the latest rejection of the proposed merger, marking the end of almost two years of court appeals.
Fairfax Media and NZME commenced discussions about the merger with Stuff in 2016
It comes a month after the two businesses, which first flagged intentions to merge in 2016, were blocked by the Court of Appeal.
When the proposed merger was first announced, NZME said it would pay NZ$55m to acquire Fairfax Media’s New Zealand assets, while Fairfax Media would obtain a 41% share in the company.
But in May last year, the proposal was blocked by the NZ Commerce Commission (NZCC) due to concerns over diversity of voice. The two businesses appealed the decision in the high court, but the plans were rejected in December 2017.
That decision was later appealed by Fairfax Media and NZME and has since been rejected by the Court of Appeal.
Stuff’s assets include stuff.co.nz, a share of neighbourly.co.nz and more than 60 metro, Sunday, regional and community newspapers. NZME’s assets include the New Zealand Herald and six regional daily papers, the NZME radio network, and e-commerce and digital classified sites GrabOne, HeraldHomes and driven.co.nz.
Today, NZME said it would not appeal the decision made by the Court of Appeal, bringing the merger proposal to conclusion.
A statement said NZME would focus on ‘strategic and operational priorities’ such as growing audience and engagement, growing advertising revenue and developing talent.
The decision comes as Fairfax Media awaits Australian Competition and Consumer Commission (ACCC) and shareholder approval for a merger with Nine.
At the time of the Nine and Fairfax Media proposed merger, Fairfax Media CEO Greg Hywood said the company was actively looking at other consolidation opportunities in New Zealand.
Fairfax Media’s market capitalisation sits at $1.52b this morning, while NZME’s market capitalisation is $113.69m.
Mumbrella has approached Fairfax Media for comment.
NZME and Fairfax proposed merger timeline:
2016:
11 May: APN News & Media in talks with Fairfax New Zealand over merger of NZME
29 June: NZME shares plummet after listing as former parent APN News & Media also takes a hit
7 September: NZME to pay $55m for majority of Fairfax NZ assets under merger plans
8 November: NZ Commerce Commission signals it will block NZME-Fairfax NZ merger due to diversity of voice concerns
2017:
3 May: NZ competition watchdog rejects Fairfax and NZME’s newspaper mega-merger
26 May: Fairfax Media and NZME fight merger rejection with High Court appeal
19 December: Fairfax Media and NZME merger will not go ahead, High Court rules
5 February: Fairfax, Stuff and NZME to appeal High Court decision which blocked merger
25 September: Court of Appeal rejects merger of Fairfax Media’s Stuff and NZME
