New buyer emerges for Stuff
A judge has revealed Australia's Nine Entertainment is in advanced negotiations to sell publisher Stuff to an un-named bidder who has made an unconditional offer timed for May 31.
Disclosure of the new bidder is the latest twist in a long fight by rival publisher NZME to join its business to Stuff, creating a media giant running the country's biggest newspapers, news sites and half the commercial radio market.
Details un-suppressed by Justice Sarah Katz in her judgment rejecting an application by NZME for an injunction stopping Nine talking to anyone else reveal that:
- The Government had already rejected NZME's request for it to pass urgent legislation to allow it to buy Stuff with limited involvement of the regulator, the Commerce Commission
- The commission itself had already declined to consider truncated processes to consider the mooted purchase
- Nine felt those two conditions meant there was no chance of NZME being able to conclude the deal, and therefore decided Nine and NZME's exclusive negotiating period for Stuff was at an end
- Nine is talking to a third party which has offered to buy Stuff unconditionally, with effect from May 31. That party's identity was not made public in court or in the latest judgment.
Justice Katz rejected NZME's bid for an injunction to force Nine to continue letting it conclude due diligence on Stuff and stop Nine talking to anyone else, because an injunction would have been against the interests of justice, the interests of Stuff's employees and would have risked potentially significant losses for Nine if the new deal was stymied.
She said if NZME was granted the interim injunction, Nine could still choose to refuse to deal with NZME.
"Nine has no obligation to conclude a deal with NZME, even if the interim orders are made. The need to obtain clearance, the time it would take to achieve that, and the uncertainties around the outcome, all lend credibility to Nine's claim that it cannot and will not do a deal with NZME, regardless of the present application.
"Quite simply, from Nine's perspective, time has run out for the NZME deal.
"It necessarily follows that the transaction that appears to have the best (Nine would say the only) prospect of success is with the competing bidder. If the interim orders were granted this would inevitably delay Nine being able to progress matters with the competing bidder. I accept [Nine's lawyer's] submission that this could potentially be fatal to that transaction."
She added, however: "Of course there is always a prospect that things could change ... The Government may change its position on promoting legislation to bypass the need for commission clearance. The competing offer may fall over."
The news of the Government declining NZME's bid for special legislation came from Nine's evidence to the court. "Attempts to find a political solution have also been unsuccessful. For example the Minister of Broadcasting has advised that no special legislation will be forthcoming to enable NZME to circumvent the commission's processes," Justice Katz wrote.
Nine told the court it believes "the alternative transaction has a real prospect of success and ... would preserve jobs within Stuff and ensure robust competition within the media marketplace."
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