Friday 28 April 2017 09:39 AM
Another day to wait on Fairfax NZ, NZME merger deal
By Paul McBeth
April 28 (BusinessDesk) - Fairfax New Zealand and NZME will have to wait one more day before finding out whether their arguments have swayed the Commerce Commission from its draft decision to reject a merger between the country's two dominant newspaper publishers.
The antitrust regulator will announce the decision on May 3 instead of the previous announced May 2, it said in a statement. The ruling will end an almost year-long review by the commission on whether to approve a merger between the two companies, which they say is necessary to stave off global internet companies poaching their advertising revenue.
The regulator will announce its decision before the market opens next Wednesday, having delayed a final ruling several times as the media companies vigorously lobbied to convince officials they'd got it wrong in their draft determination to reject the deal over fears the aggregated soft power wasn't worth the economic efficiencies from laying off staff, cutting duplication, and pooling their resources in a more targeted fashion.
The news organisations have previously said the merger would give them a fighting chance against Google and Facebook which dominate digital advertising markets, and have downplayed the size of editorial job cuts, which would account for about 10 percent-to-13 percent of the projected $136.5 million to $218.7 million of quantified benefits over five years.
If the deal doesn't proceed, Australian parent Fairfax Media Group has indicated it still plans to quit the New Zealand business and previously confirmed the Kiwi organisation has attracted a low-ball offer from a secret suitor.
NZME was already carved out from its Australian parent, APN News & Media, as a standalone business listed on the NZX and ASX, and was pitched to investors as a stock offering regular dividend payments, attracting substantial stakes from the likes of including Forager Funds Management, Perpetual, Westpac Banking Corp, and Morgan Stanley.
NZME shares last traded at 87 cents and have jumped 47 percent so far this year.