NZME-Stuff merger plan back on, Aussie paper claims

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NZME-Stuff merger plans have been revived, according to a report in The Australian.

The paper says it understands NZME (publisher of the NZ Herald) is driving the reanimated push, which is said to involve a direct approach to the government.

It says NZME and Nine (the Australian owner of Stuff) are trying to bypass the Commerce Commission by securing a law change, or a ministerial directive for an exemption from the Commerce Act.

Stuff chief executive Sinead Boucher told the Herald, "There is nothing like that brewing. It is not on our agenda at all."

A spokesman for NZME said "it is New Zealand Media and Entertainment policy not to comment on speculation of this nature. NZME remains in compliance with its continuous disclosure obligations."

It is not the first time The Australian has speculated on the future of NZME.

In January, it reported that ASX-listed regional television and radio broadcaster Southern Cross Media Group was preparing a bid for NZME.

That story came to nothing.

An NZME-Stuff merger was first proposed in 2016. The Commerce Commission blocked the deal in May 2017. The regulator's decision was upheld in an October 2017 High Court case, and again in the Court of Appeal in September last year.

Stuff's Australian owner, Fairfax, was bought by Nine in a A$2.16 billion deal last July.

Nine subsequently put Stuff on the block, but found no buyers.

NZME shares closed yesterday up 8 per cent to 54c for a market cap of just under $100m.

The media company's stable includes the NZ Herald, provincial newspapers, radio station including NewstalkZB, Radio Sport, The Hits and Radio Hauraki, and e-commerce plays including GrabOne, Yudu and OneRoof.

In the first half, it reported a net profit of $11.6 million and Ebitda of $54.7m on trading revenue that declined 2 per cent to $378.4m.

Chief executive Michael Boggs told a recent Tuanz conference on digital convergence that NZME has to contend with the global OTT or "over the top" players such as Facebook which have gobbled up so much of the local advertising spend.

He outlined the company's response, noting the initial success of the NZ Herald paywall. It launched on April 30 and reached 10,000 paid subscribers - its 12-month target - in six weeks.

In its decision blocking the NZME-Stuff merger, the ComCom focussed heavily on the two companies' market position in print.