NZME has withdrawn an application to the Commerce Commission to purchase rival Stuff after the High Court today declined to grant an interim injunction concerning exclusive negotiations with Stuff owner Nine Entertainment.
In her judgment, Justice Katz declined to make the interim orders sought by NZME following a hearing on Friday.
This means NZME has been unsuccessful in its attempt to enforce Nine to abide by the terms of a contract of exclusivity between the parties running until 31 May. NZME had been in negotiations to buy Stuff for $1 - any deal would have seen it also take on Stuff's liabilities.
Jutice Katz said her decision did not determine which party was correct, but rather whether it was in the overall interests of justice to make the interim order sought by NZME.
In a market statement, NZME told the NZX it was "disappointed but respects the Court's decision".
NZME had accordingly withdrawn its Commerce Commission application for clearance to buy Stuff.
"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.
"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."
A spokesperson for Nine said:
"We welcome today's decision and continue to operate Stuff and work for the best outcome for our audience, our people and the wider business."
At the hearing 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, adding that 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."
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NZME initially sought three weeks to complete extra, or "top up", due diligence on Stuff, but the parties ended up agreeing on two weeks once NZME received all relevant information.
Nine's legal team, led by John Dixon QC, said Nine felt the process had been frustrated and therefore terminated the negotiations.
The hearing followed an exchange of statements last week after NZME filed an urgent Commerce Commission application to purchase Stuff for a nominal sum of $1.
NZME said it has an exclusive agreement to negotiate the purchase of Stuff.
Nine responded with a statement saying the parties had withdrawn from the bid last week and had terminated talks.
NZME hit back, saying it still had exclusivity and ultimately took legal action to enforce it.
Justice Katz will release her full judgment later this week, subject to any suppression orders.