NZME makes Stuff media powerplay
New Zealand's biggest media company NZME has stunned media rival Stuff with a $NZ1 takeover offer in a reboot of the "StuffMe" merger.
In a statement to the New Zealand stock exchange on Monday morning, NZME announced its proposal to acquire Stuff, owned by Australia's Nine Entertainment.
To get the deal done, NZME has asked the government to grease the skids with urgent legislation within three weeks, fast-tracking an approval process.
However, Stuff chief executive Sinead Boucher declared the offer "very surprising to both Nine and ourselves" in a company-wide email.
Ms Boucher said the two companies were in talks up until last week, when Nine terminated the discussions without a deal.
"We are really not sure why NZME took this step, given the clear message from our owners that there would be no transaction," Ms Boucher wrote.
"There is no deal between NZME and Nine."
NZME chief executive Michael Boggs responded in another NZX statement, saying "NZME's view is that it is still in a binding exclusive negotiation period with Nine and does not accept that exclusivity has been validly terminated".
The explosive powerplay comes after years of negotiations between the two companies, including a failed merger in 2017, knocked back by the NZ Commerce Commission.
In the latest bid, NZME has filed for clearance from the competition regulator and sensationally asked the government this month for a law.
Prime Minister Jacinda Ardern appears unwilling to play ball, calling the bid "a commercially sensitive issue and not one that I'm going to comment on".
"There may well be more than one group involved in that scenario so it's not for me to enter into any dialogue."
NZME says "consolidation is urgent in the face of dramatically declining advertising revenue and current general economic conditions" in its NZX statement.
"NZME continues to believe that it is the best owner for Stuff, as it is best placed to preserve mastheads, newsrooms and jobs," it continues.
"NZME's proposed acquisition of Stuff is important to the continued operation of a robust fourth estate and plurality of voice in this country.
"If approved, the acquisition should lower the costs of producing New Zealand news by combining NZME and Stuff's business operations, with those savings supporting the future of New Zealand journalism by a local, committed national news media outlet."
NZME owns Auckland masthead the New Zealand Herald, as well as a string of radio stations, regional newspapers and other entities.
Stuff is the country's most-popular news website, publishing Wellington's Dominion Post and Christchurch's The Press among other titles.
Both companies have engaged in cost-cutting during the coronavirus pandemic, with NZME announcing 200 redundancies last month.
In February, NZME posted a $NZ165 million loss ($A155 million) amid writedowns.
NZME's share price closed up 14 per cent to 0.24 cents in Monday trading, while Nine Entertainment finished up four per cent at $1.45.
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