NZME, Fairfax reviewing rejected merger appeal, play up alternative strategies
By Paul McBeth
Dec. 19 (BusinessDesk) - NZME and Fairfax Media are playing up the alternative strategies they've run since the Commerce Commission first rejected their planned merger, and are reserving their position on whether to appeal a High Court decision upholding the block.
New Zealand's dominant newspaper publishers received the judgment rejecting their appeal yesterday, with the full ruling expected before the end of the day once commercially sensitive information has been removed from the public document. Both media companies expressed disappointment and said they were reviewing the ruling.
However, the companies published separate statements in contrast to past joint releases on the merger, and each talked up the strategies they'd pursued in parallel with the merger effort.
NZME chief executive Michael Boggs said the publisher of the New Zealand Herald's strategic and operational priorities include growing its reach with better and more targeted content, preserving print revenue with a better proposition, expanding radio by building on higher ratings, introducing new revenue streams in digital classified ads, keeping a lid on costs, and developing talent.
"We will continue to examine shareholder value enhancing strategic initiatives leveraging our strong brands and audience reach, while enhancing the competitiveness of content generation and distribution," Boggs said. "We remain very much of the view that the New Zealand media sector is an exciting place to operate, and while there are headwinds in some areas, there are real opportunities in others."
NZME shares were unchanged at 87 cents and have gained 47 percent so far this year.
Fairfax group chief executive Greg Hywood said the New Zealand division is "embracing radical change" to build its hyper-local Neighbourly website alongside the Stuff news website, and at the same time tack on complementary services such as fibre broadband connections, retail electricity, on-demand video streaming and a health insurance product.
"Together, Stuff and Neighbourly have more than 1 million unduplicated members," Hywood said. "This shows the business is in the hands of talented, passionate people who will carve out a prosperous future for the company."
ASX-listed Fairfax, which recently split off its Domain real estate listing business as a standalone entity, closed at 77.5 Australian cents yesterday and has gained 35 percent so far this year.