The agreed merger between NZME and Fairfax Media’s New Zealand arm Stuff Limited has been terminated with the intention to reassess the deal if the companies’ High Court appeal is successful in June.
The Merger Implementation Agreement (MIA) which was agreed to in September 2016 will be renegotiated with “new commercial terms” following the significant changes within the market during the year-and-a-half period since its signing.
In a statement released to the ASX this morning, the company’s said the recent development will not have an impact on the current court proceedings, due to take place from June 5 to June 8.
“The parties will continue with the Court of Appeal proceeding regarding the proposed merger of the two businesses.
“If the appeal is successful, the parties intend to negotiate a new agreement to realise the significant benefits of the merging of operations of Stuff Limited and NZME.”
Stuff Limited rebranded from Fairfax Media NZ in February, with the change also heralding a restructure of the business’s operations and focus.
Sinead Boucher, who was appointed as CEO six months ago, announced last month that the company would be pushing further into digital, with the Stuff set to sell off or close 28 mastheads this year.
Stuff has also significantly expanded its alternate revenue streams recently, further investing in hyper-local social network Neighbourly and launching energyclub.co.nz and Stuff Fibre.
The initial MIA had NZME set to acquire the entirety of Fairfax’s New Zealand assets for $55 million and giving the Australian publisher 41 per cent of shares in NZME.
The appeal to the high court follows the rejection of the merger the Commerce Commision in May 2017, citing the merger would create lessened media diversity.
The appeal that followed was also knocked back in December when the high court found the publishers were unable to mount a substantial case against the watchdog’s disregard for digital giants Facebook and Google in the initial adjudication.