New Zealand media giant NZME launched a symbolic NZ$1.00 (US$0.61) takeover bid for rival Stuff Limited on Monday in the latest effort to consolidate the country’s news industry during the coronavirus-induced downturn.
But Stuff’s Australian owner, Nine Entertainment, swiftly rebuffed the offer in a statement to the Australian Stock Exchange.
“Whilst Nine confirms that it has had discussions with NZME regarding the acquisition of Stuff, Nine has notified NZME that it has terminated further engagement with NZME,” it said.
The bid reflected the difficulties facing the media in New Zealand, where COVID-19’s impact has slashed revenues in a sector already struggling against the might of global internet giants such as Facebook and Google.
“NZME’s proposed acquisition of Stuff is important to the continued operation of a robust fourth estate and plurality of voice in this country,” NZME said in a statement.
NZME owns the New Zealand Herald and a string of radio stations while its Australian-owned target operates the country’s most popular news website stuff.co.nz and titles such as Wellington’s Dominion Post and the Christchurch Press.
The companies already had a merger proposal rejected by the competition watchdog in 2017.
At the time, the Commerce Commission said the plan would create a giant that would dominate New Zealand’s print and online news, presenting a “meaningful” risk to democracy.
NZME argued in Monday’s statement to the New Zealand stock exchange that its proposed takeover “will not substantially lessen competition in any market”.
“The New Zealand media sector is 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.
NZME last month announced 200 job losses as a result of the virus-induced downturn.
Stuff and NZME have both asked staff to take pay cuts.
German magazine giant Bauer Media Group closed its New Zealand titles with the loss of 237 jobs last month, citing the “severe economic impact” of the pandemic.