NZME, the owner of the NZ Herald, has filed an urgent Commerce Commission application on Monday to purchase rival publisher Stuff for $1 - a move it says will help to save newspapers and jobs as the industry faces huge financial challenges due to the COVID-19 pandemic.
The company, which hopes to acquire Stuff by May 31, is seeking urgent Government assistance to pass legislation to allow the purchase.
In a market announcement to the NZX, NZME revealed that it entered an exclusive negotiation period with Stuff's Australian-based owner, Nine Network, on April 23.
As reported by the NZ Herald, the $1 purchase price excludes "certain non-media assets" but includes Stuff's material trading assets and liabilities.
In its NZX announcement, NZME said it believes the country's media sector is "too small for the current number of quality participants", calling for "urgent" consolidation in the face of dramatically decreasing advertising revenue and the current economic conditions.
NZME is the best owner for Stuff as it is "best placed" to preserve newsrooms, mastheads and jobs, according to the announcement. The company claims its acquisition of the outlet will not "substantially lessen competition in any market".
"NZME's proposed acquisition of Stuff is important to the continued operation of a robust fourth estate and plurality of voice in this country," NZME told the NZX, as reported by the Herald.
"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."
On Monday, NZME chairman Peter Cullinane and CEO Michael Boggs reiterated the company's respect for the Commerce Commission's procedures in a letter to Broadcasting Minister Kris Faafoi. The letter referenced the closure of Bauer Media early in April, saying the company is focused on preserving hundreds of jobs and regional mastheads.
The sudden closure of the New Zealand branch of the German-owned magazine publisher was largely due to the impacts of New Zealand's COVID-19 response, with magazines and newspapers deemed as non-essential services under the four-week lockdown.
"The significant obstacle we face is that there is insufficient time to do so given the extraordinary conditions the industry finds itself in... time is of the essence and we seek your urgent assistance to allow completion by 31 May 2020," says an excerpt of the letter, as published by the outlet.
NZME and Stuff own the majority of New Zealand's daily metropolitan and regional mastheads. As well as the NZ Herald, NZME also owns the Northern Advocate, Bay of Plenty Times, Hawke's Bay Today, Rotorua Daily Post and Whanganui Chronicle. It also owns a number of radio stations, including Newstalk ZB, ZM and Radio Hauraki.
Stuff has ownership of publications including the Sunday Star-Times, The Press in Christchurch and the Dominion Post in Wellington.
NZME has spent the best part of five years attempting to buy Stuff, but has previously been declined Commerce Commission clearance. A previous bid to acquire the outlet was blocked in 2017 over competition concerns.