New Zealand media company NZME has abandoned its bid to buy rival outlet Stuff, withdrawing its application to the Commerce Commission seeking permission for the purchase.
The move followed the High Court's refusal to grant NZME an interim injunction that would have forced Stuff's Australian owner, Nine Entertainment, back into an exclusive negotiation period regarding the website's sale.
Last week, NZME - which owns the New Zealand Herald and Newstalk ZB - announced it had filed an urgent Commerice Commission application to purchase rival outlet Stuff for a nominal sum of $1. The company, which hoped to acquire Stuff by May 31, sought Government assistance to pass legislation to allow the purchase.
In a market announcement to the NZX, NZME said it had entered an exclusive negotiation period with the Nine Network on April 23.
The claim was challenged by Nine Entertainment, the company issuing a statement saying that talks regarding the acquisition of Stuff had been terminated last week with no deal.
NZME claimed it still had exclusivity and took legal action, arguing in the High Court on Friday that Nine had breached the exclusive, two-week negotiating period. Nine denied these allegations.
In her judgment on Tuesday, Justice Katz declined to make the interim orders sought by NZME and dismissed the matter, as reported by the NZ Herald.
Jutice Katz noted that the decision does not determine which party was correct, but whether it was in the overall interests of justice to make the interim order sought by NZME.
On Friday, NZME's lawyer, Jack Hodder QC, told the court that confidential, non-binding, exclusive negotiations were entered into with Nine on April 23.
"For NZME to invest time and cost in pursuing a transaction it needed to undertake due diligence," he said. As reported by the NZ Herald, the terms of the contract were binding and accepted by email.
"There was a contract of exclusivity, that period has not expired because the due diligence has not been provided. It hasn't come to an end."
NZME initially sought three weeks to complete additional due diligence on Stuff, but once the company had received all the relevant information, the parties agreed on two weeks.
Nine's legal team, led by John Dixon QC, said the media company felt the process had been 'frustrated' - a contract law term that effectively means null and void - and therefore terminated the negotiations.
In a statement to the NZX following the court decision, the company confirmed it had advised the Commerce Commission that NZME's subsidiary, NZME Holdings Limited, had withdrawn its application to make the purchase.
"NZME is disappointed but respects the Court's decision.Should there be a credible buyer for Stuff who will protect jobs, newsrooms and mastheads then NZME believes this should be positive for New Zealand media," NZME said.
"However, if this is not the case then NZME continues to believe that it would be best placed to sustain and support Stuff's mastheads, newsrooms and jobs in the interests of maintaining a robust fourth estate and plurality of voice in New Zealand."