21 May 2020

Another possible Stuff buyer emerges

From Mediawatch, 3:33 pm on 21 May 2020

A High Court judgment has revealed that an entity other than New Zealand Herald owner NZME is interested in buying the country's biggest news publisher Stuff - and a deal could be done by the end of this month.

stuff logo

stuff logo Photo: supplied

Stuff’s owner - Nine Entertainment in Australia - abandoned its negotiations with NZME after getting another offer from a prospective buyer, the judgement from Justice Sarah Katz revealed today. 

But the identity of the prospective owner is still under wraps. 

NZME went to court last week seeking an injunction to prevent Nine Entertainment bargaining with any other buyer. It argued Stuff's owner had breached the 14-day exclusive negotiation agreement it entered into with NZME on April 23.

Earlier it had announced it wanted to buy Stuff for $1 and asked the government to pass legislation expediting the deal, allowing it to skirt the need for Commerce Commission approval.

Nine Entertainment insisted no such deal had been agreed and negotiations with NZME were already over.  

In court, Nine Entertainment's lawyer accused NZME of damaging Stuff with its actions.  

Nine Entertainment said the alternative offer wouldn’t require permission from the Commerce Commission. It is now planning to complete the sale with the prospective third-party buyer on May 31. 

So far NBR owner Todd Scott - who recently completed a buyout of the publication which began in 2012 - is the only person to publicly express interest in buying the business.

"We are very serious about taking over the liabilities of Stuff NZ," he said in an online post earlier this month. 

He said the Commerce Commission, the Minister of Broadcasting and the opposition Broadcasting spokesperson had been informed of his plan.

Today he described Nine's move as "logical" on Twitter and shared a link to an under-construction website combining the names of two Stuff papers: 

Scott has named Australian private equity firm Anacacia Capital as a backer. Last week the firm refused to confirm to RNZ if it had an interest in a deal for Stuff.  

In the judgement outlining her reason for declining NZME's application for an injunction against Nine Entertainment, Justice Sarah Katz said on the face of it, there was a legitimate argument that Nine Entertainment breached the conditions of its exclusive negotiations period with NZME.

But she concluded that the potential cost to Nine Entertainment of forcing it back into exclusive negotiations outweighed the price NZME would have to pay if she refused an injunction.

It was unlikely Nine Entertainment would accept NZME’s offer even if she forced it back to the bargaining table, because it didn’t want to accept a deal that would require Commerce Commission approval. Katz pointed to the fact that the government had already signaled it wouldn't pass special legislation to allow the NZME-Stuff merger.

Meanwhile, Nine Entertainment’s separate deal with a third party might fall through if it had to resume negotiations with NZME, the decision said. Justice Katz noted that would also essentially force Nine to open its books to a competitor, despite having no intention of selling Stuff to that business.