A leading media commentator is concerned about the prospect of a private equity firm taking over Stuff after NZME withdrew its bid for the firm today.
Gavin Ellis, a former senior lecturer at the University of Auckland and previous NZ Herald editor, says a High Court decision dismissing NZME's application to enforce exclusive negotiations with Nine Entertainment has left the door open for an overseas investment firm to buy Stuff.
NZME, which publishes this website, had been in negotiations to buy Stuff for $1. Any deal would have seen it also take on Stuff's liabilities.
Nine has tried unsuccessfully to sell Stuff for some time.
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Ellis, who served as the Herald editor-in-chief from 2000 to 2005, says NZME withdrawing its bid increased uncertainty about Stuff's future.
"Nine Entertainment has made it abundantly clear that it wants out of New Zealand," Ellis said.
"That desire does not end with NZME's withdrawal from the race. It simply means that we are now faced with the prospect of unknown suitors."
The media is speculating another party is interested in buying Stuff, with Australian-based private equity fund Anacacia Capital one name mentioned.
Ellis anticipates any new bidder will likely be foreign and come from the private-equity space.
"If we look at what's happening in the Australian market, most of the current transactions involve private-equity companies, so we would likely see private equity suitors coming into the local market."
Ellis says this presents a number of concerns for the future of New Zealand media in light of the decision to close Bauer's New Zealand business.
"What Bauer did worries me because it shows the potential of foreign owners to close and walk away," he says.
The unilateral decision by Bauer ownership to leave New Zealand led to 250 staff losing their jobs with little notice.
Ellis says a private-equity company would likely step in to try to extract what value is left in the business before moving on.
"Private-equity companies often have short investment horizons – three to five years for many of them," says Ellis.
When NZME and Stuff first attempted to merge five years ago, Ellis opposed the move over concerns that it wouldn't provide sufficient safeguards for editorial independence for the different titles.
He has, however, changed his stance, telling the Government Epidemic Response Committee in April that the circumstances had changed and the merger should be allowed to go ahead to avoid another "potential Bauer".
Ellis said he believed a local media company would be more likely to protect journalists' jobs than a foreign owner looking to make a short-term profit.
In declining NZME's application for an interim injunction, 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.
NZME told the NZX it was "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.
"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."