NZME, Fairfax to appeal High Court decision upholding blocked merger
By Rebecca Howard
Feb. 5 (BusinessDesk) - NZME and Fairfax Media Group will appeal a High Court decision upholding their blocked merger and will focus on the issue of plurality.
"After careful review and analysis of the High Court's reasons, the companies continue to believe that the NZCC (New Zealand Commerce Commission) was wrong in fact and wrong in law to decline clearance or authorisation of the merger," NZME said in a statement.
Last May the Commerce Commission declined to clear or authorise the merger of New Zealand's dominant newspaper publishers, NZME and Stuff, which is the local unit of Fairfax Media, arguing it would concentrate too much media influence in one entity.
The subsequent appeal by NZME and Stuff, heard in the High Court in October 2017, was unsuccessful when Justice Robert Dobson and lay member Professor Martin Richardson dismissed it, finding the regulator was entitled to place significant weight on the loss of media plurality if the merger went ahead.
The High Court's findings increase the range of estimated quantifiable net benefits to the public arising from the transaction to $133 million to $209 million, up from the Commerce Commission's estimated range of $41 million to $204 million, however the High Court still found that these benefits were outweighed by the expected loss of plurality in the media, NZME said.
According to NZME, however, "the findings of the High Court revealed that the NZCC had significantly understated the quantifiable public benefits from the proposed merger."
Given the "potentially significant benefits from the merger, NZME is of the view that appealing the High Court decision is in the best interests of NZME, its shareholders and consumers," it added.
NZME shares fell 1.2 percent to 83 cents and are up 26 percent over the past year. ASX-listed Fairfax last traded at 72 Australian cents and have lifted 23 percent since early February last year.