NZME appeals for ‘urgent government action’ to acquire Stuff for $1, but Nine has ‘terminated discussions’
New Zealand publisher NZME has announced plans to acquire Nine’s Stuff for $1, pushing for ‘urgent government action’ to allow the deal.
But Nine has said that while it was in negotiations with NZME up until last week, those conversations had been ‘terminated’. The media business was blindsided by NZME’s comments this morning, with Stuff CEO Sinead Boucher calling it ‘surprising’.
“This announcement was very surprising to both Nine and ourselves. While Nine and NZME had been in discussions around the sale/purchase of the Stuff business, these were terminated by Nine last week. There is no deal between NZME and Nine,” said Boucher.
“We are really not sure why NZME took this step, given the clear message from our owners that there would be no transaction.”
Nine has been investigating the sale of Stuff for some time, with NZME claiming the two entered an ‘exclusive negotiation period’ in April. NZME has advised it ‘does not accept’ Nine’s termination of the period.
The publishing industry in New Zealand has taken some big hits following the COVID-19 outbreak, with Bauer Media choosing to close its operations in the market. Stuff reports that NZME has made 200 roles redundant since the pandemic began.
NZME and Stuff have attempted to merge previously, prior to Nine and Fairfax’s merger, but the partnership was blocked.
NZME advised it had engaged with the New Zealand Commerce Commission and filed for clearance to acquire Stuff ‘urgently’.
“NZME believes that the New Zealand media sector is too small for the current number of quality participants and consolidation is urgent in the face of dramatically declining advertising revenue and current general economic conditions. NZME continues to believe that it is the best owner for Stuff as it is best placed to preserve mastheads, newsrooms and jobs,” read a statement from NZME.
“NZME considers that in the current New Zealand media landscape, NZME’s acquisition of Stuff will not substantially lessen competition in any market.”
NZME shares rose 17% to 25c on the NZX in the wake of NZME’s announcement, despite Nine’s confirmation it is not currently in discussions with the business.
If Bauer NZ closing wasn’t bad enough, this deal would massively increase NZ media consolidation. It would mean nearly 100% of NZ newspapers, magazines and commercial news radio would be owned by the one company, along with one of two substantial private TV companies.
Outside the NZME/Stuff operation would be TVNZ, Sky and that’s about it.
Perhaps the best alternative suitor for Stuff is ACM, which is experienced at getting value out of newspapers Nine considers too low yield.
Sky could buy it, but it hasn’t yet shown much interest in generating Kiwi content (outside of filming sport), which is what Stuff is all about.
Seven could make it work at least as well as Nine does, but is of course massively hampered by it’s financial woes.
It could be nationalised via TVNZ, but that seems unlikely.
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