Nine Network says talks with NZME over Stuff acquisition were 'terminated' last week

NZME. Photo credit: File

 The plot has thickened since NZME revealed it had lodged an application with the Commerce Commission to buy rival publisher Stuff for just a dollar, with both Stuff and its Australian owner, Nine Network, now claiming the talks have been terminated.

In an announcement to the NZX on Monday, NZME, the owner of the New Zealand Herald and Newstalk ZB, said it had entered an "exclusive negotiation period" with Nine on April 23. 

In the statement, the company said it was seeking urgent legislation to allow it to buy Stuff for just "$1" by May 31, claiming the move would preserve numerous jobs and newspapers. It cited the industry's dramatically declining advertising revenue and the current economic conditions due to COVID-19 as reasons why it should take ownership of the outlet, including the "continued operation of a robust fourth estate and plurality of voice in this country".

Now, Nine has responded to the claims in a statement to the ASX. Although the network acknowledged it had discussions with NZME regarding the acquisition of Stuff, Nine claimed it notified the company that "further engagement with NZME" had been terminated. 

As reported by Stuff, a Nine spokesman said the network had terminated talks with the New Zealand company "last week" and no further negotiations were currently taking place.

Stuff chief executive Sinead Boucher said NZME's NZX announcement had been "very surprising to both Nine and ourselves".

"We are really not sure why NZME took this step, given the clear message from our owners that there would be no transaction," she said, as reported by the outlet.

Following NZME's announcement on Monday morning, the company's shares rose by 17 percent to 25 cents on the NZX despite Nine's response.

When asked for comment by Stuff, an NZME spokesperson would not comment on whether the $1 price tag had been agreed to by Nine or whether the company's statement may have misled investors.

NZME has since made a second statement to the NZX acknowledging Nine's response.

"NZME notes Nine's announcement that it has terminated further engagement with NZME in relation to any acquisition of Stuff," says the statement. 

"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 company's original claim that the exclusive period with Nine had been entered on April 23 did not refer to any date of termination, implying the two were still in ongoing negotiations. 

NZME argued it is "best owner" for Stuff as it is "best placed to preserve mastheads, newsrooms and jobs".

"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," the company said in its statement to NZX.

"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."

A spokesperson for Broadcasting Minister Kris Faafoi confirmed he had received a letter from NZME chairman Peter Cullinane and CEO Michael Boggs. The letter outlined the company's plans to apply to the Commerce Commission to purchase Stuff, requesting the Government assistance to pass legislation to allow the transaction to happen.

NZME has made more than 200 positions redundant due to the COVID-19 lockdown.