Nine Entertainment says it has ended talks on selling Stuff to NZME

Nine says talks are off over the sale of its New Zealand business Stuff to NZME, but the NZ media heavyweight doesn’t agree.

Nine CEO Hugh Marks. Picture: Gary Ramage

Nine Entertainment is understood to be in talks with potential buyers of its embattled New Zealand media business Stuff after walking away from NZME’s paltry $NZ1 (93.6c) offer, a fraction of the more than $1bn former Fairfax boss Fred Hilmer paid for the business nearly two decades ago.

The Australian understands that Nine is “talking to other ­potential buyers” following conflicting public statements by the media group and its trans-Tasman rival over the future ownership of Stuff, which is being monitored closely by the Australian Securities Exchange.

On Monday The Australian’s DataRoom column revealed Sydney-based private equity firm ­Anacacia Capital is believed to have held discussions with Nine Entertainment.

Nine said on Monday that it had called off talks with NZME over the proposed sale of Stuff, which the media group inherited from its $4bn merger with Fairfax Media in December 2018. But the New Zealand media heavyweight insists it is still in a “binding ­exclusive negotiation period”.

Nine issued a brief statement to the ASX on Monday acknowledging an earlier statement by NZME announcing the NZ group’s proposal to acquire Stuff from Nine.

Nine said talks were off, and Stuff CEO Sinead Boucher declared the negotiations had ended last week.

“Whilst Nine confirms that it has had discussions with NZME regarding the acquisition of Stuff, Nine has notified NZME that it has terminated further engagement with NZME,” Nine said in its two-sentence statement to the ASX.

Nine’s statement prompted NZME to issue a second announcement, rejecting Nine’s view that talks were off.

“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,” NZME said in a brief statement, authorised by chief executive Michael Boggs.

An NZME spokesman declined to comment beyond the group’s two statements to New Zealand’s exchange. A Nine spokeswoman declined to comment beyond its announcement.

A spokesman for the ASX told The Australian the organisation was “closely monitoring” the situation.

“Any dispute is a matter for the parties to resolve. ASX would expect the market to be updated if and when appropriate,” he said.

NZME owns Auckland masthead the New Zealand Herald, as well as a string of radio stations, regional newspapers and other media entities. Stuff is the country’s most popular news website and its biggest employer of journalists, publishing Wellington’s Dominion Post and Christchurch’s The Press, among other titles.

Nine and previous Australian owner Fairfax have been attempting to offload the Kiwi media company for years. The NZ Commerce Commission rejected a merger between NZME and Stuff in 2017.

Nine issued its statement less than an hour after NZME disclosed it had written to the Ardern government “seeking urgent legislation” that would allow the company to buy Stuff by May 31.

NZME said the legislation change would help its acquisition of Stuff for $NZ1, excluding certain non-media assets.

NZME said it had agreed to an exclusive negotiation period with Nine on April 23 and, with the government’s support, it was “aiming to complete the transaction” by May 31. The group said it had been engaging with the New Zealand Commerce Commission and had filed for clearance on Monday requesting that the commission consider the application under urgency.

“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,” it said.

“NZME continues to believe that it is the best owner for Stuff as it is best placed to preserve mastheads, newsrooms and jobs. NZME considers that in the current New Zealand media landscape, NZME’s acquisition of Stuff will not substantially lessen competition in any market.”

NZME said its proposed acquisition of Stuff was “important to the continued operation of a robust estate and plurality of voice in this country”.

NZME said it was not seeking financial assistance from the Ardern government to buy Stuff.

John Fairfax Holdings, under the helm of then CEO Mr Hilmer, bought Independent Newspapers’ NZ publishing businesses, now operating under the holding company Stuff, for $NZ1.19bn in 2003.

Australia’s media companies have been lobbying the federal government for years to make tech giants pay for siphoned news content posted on their platforms, with the Morrison government last month finally announcing it would force the tech players to pay.

NZME’s $NZ1 offer for Stuff does not even cover the cost of one copy of Stuff’s major newspaper, The Sunday Star-Times, which has a cover price of $NZ4.

Nine shares closed 3.6 per cent higher at $1.45 on Monday, while NZME closed up 14 per cent at NZ24c on the NZE.