Stuff, one of New Zealand's largest media companies, has been sold to management for $1.
Nine Entertainment announced the sale on the ASX on Monday morning. The new company will be led by Stuff's chief executive, former journalist Sinead Boucher.
The deal ends years of speculation about the company's ownership, after lengthy attempts by NZME, owner of the New Zealand Herald, to buy the company were unsuccessful.
"Like all of you, I have been looking forward to the day the protracted uncertainty around our ownership would come to a conclusion so we could focus on building for the future," Boucher said in an email to the company's staff on Monday.
The process to buy the company "moved very quickly" when it became clear NZME would not be able to reach a deal to buy the company.
Boucher said she planned to develop "an ownership model which will give staff a shareholding stake in the business" adding that it would take time to work out how this would happen.
Under the deal, Nine will retain ownership of Stuff's Petone plant, where the company prints some of its newspapers, and will lease it back to the New Zealand company.
Nine, which acquired Stuff when it bought Fairfax Media, will also receive potential proceeds from the recent sale of wholesale broadband business Stuff Fibre. The sale is expected to be completed by May 31.
Boucher told NZME the purchase gave Stuff "a real chance to take our destiny into our own hands and forge a really bright new future".
But the buyout did not fix any of the issues swirling around media companies thanks to the Covid-19 pandemic.
"Before we came into this Covid crisis Stuff was doing really well. We had great H1 results, we were tracking along well for the year."
But advertising had dried up as businesses went into shock, and it would be a long road ahead for those businesses to rebuild.
"We'll have to be really bold and inventive in what we do."
She was hoping that the fact Stuff was now locally owned meant customers and readers would support the company.
Although Boucher will be the sole owner initially, the plan is to transition into staff being stakeholders, as well as bringing in new investors and partners.
The executive team had already been looking at new initiatives while still owned by Nine. It would now reconsider which of those were viable under the new ownership model.
Boucher couldn't rule out job cuts - this morning's Mediaworks announcement showed how tough the environment was at the moment.
"I think there's probably not a business in New Zealand that could give you a crystal ball about what's ahead in the next months."
In a statement, Nine's chief executive, Hugh Marks, said the company had always believed it was important for Stuff to have local ownership.
"It is our firm view that this is the best outcome for competition and consumers in New
Some of the proceeds of Stuff's recent sales of its broadband business "will be used to assist Stuff to operate as it settles into its new ownership structure".
Boucher said the transaction gives Stuff greater certainty as it copes with an advertising market hit by Covid-19.
"Local ownership will bring many benefits to our staff, our customers and, indeed, to all Kiwis, as we take advantage of opportunities to invest in and grow the business."
Speculation that Boucher was planning to buy the company mounted after she formed a new company, Kenepuru Holdings Limited, a week ago.
Nine had earlier rejected an offer from NZME to buy Stuff, also for $1.
Kris Faafoi, Minister of Broadcasting, Communications and Digital Media, said today's news was a reminder about the volatility in the media sector, exacerbated by the pandemic.
The sector would inevitably face fundamental changes in the future, Faafoi said.
"The Government is working through the details of its longer-term approach to media -sector support which can ensure a strong, sustainable, and diverse news media for New Zealanders and we will have more to say on that in the coming weeks."