(Reuters) - One of New Zealand’s biggest media organisations, NZME Ltd (NZM.NZ), asked the government on Monday for special legislation to allow it to buy rival news firm Stuff for a dollar, saying urgent consolidation was needed due to the coronavirus crisis.
NZME said the New Zealand media sector was “too small for the current number of quality participants and consolidation is urgent in the face of dramatically declining advertising revenue and current general economic conditions.”
It said it had filed a request with the New Zealand Commerce Commission to consider the application with “urgency”. It did not specify what legislation was required from the government, although an NZME bid for Stuff was rejected in 2017 on competition grounds.
Stuff has since changed ownership to Australia-listed Nine Entertainment Co Holdings (NEC.AX), which said talks between the two companies were terminated last week.
“We are really not sure why NZME took this step, given the clear message from our owners that there would be no transaction,” Stuff Chief Executive Officer Sinead Boucher said in an email to staff which was seen by Reuters.
“There is no deal between NZME and Nine.”
Auckland-based NZME, owner of the New Zealand Herald, said however that it believed the exclusive negotiation period still stood and it wanted to buy Stuff for NZ$1 by the end of May, excluding some non-media assets.
“NZME continues to believe that it is the best owner for Stuff as it is best placed to preserve mastheads, newsrooms and jobs,” it said, adding the deal would not hurt competition.
NZME shares soared 18.6% to NZ$0.255, far outpacing a 0.3% gain by the broader index .NZ50.
The coronavirus pandemic has hammered the media industry, threatening jobs and smaller outlets as companies slash spending on advertising to conserve cash.
A commission spokeswoman said an application had been received from NZME but declined to comment further.
Reporting by Nikhil Kurian Nainan and Shriya Ramakrishnan in Bengaluru; Editing by Peter Cooney and Stephen Coates