WELLINGTON: Fairfax Media’s New Zealand assets have been valued at $122.2 million in the proposed merger with NZME. The companies this week said Auckland-based NZME will pay Sydney-based Fairfax $55m in cash and issue shares for Fairfax’s New Zealand assets, giving the Australian group 41 per cent of the merged entity if it can convince the antitrust regulator enough public benefits will be accrued from authorising a deal that would reduce competition.
NZME, publisher of the New Zealand Herald and other publications, today filed a directors’ certificate to the Companies Office to approve the issue of shares equal to 41 per cent of the newspaper publisher and radio station owner at 83.6 cents a share.
That’s a premium to the 73 cents price the shares were trading at when the announcement was made, and values the scrip component of the deal at $67.2m. NZME shares recently traded at 80 cents valuing NZME at $156.8m. The September 6 resolution, signed by chairman John Anderson and directors Peter Cullinane and Carol Campbell, said the price was the volume weighted average for the 10 trading days before the agreement and wasn’t less than “the amount to be credited for the issue of shares”.
“In our opinion, the consideration for, and terms of the issue of, the acquisition shares are fair and reasonable to the company and to all existing shareholders,” the notice said. The merger of Fairfax and NZME’s assets are seen as a way they can start competing online where the likes of Google and Facebook dominate advertising revenue.
The companies are seeking Commerce Commission authorisation for the deal, a higher threshold to cross than a clearance in that it claims an anti-competitive transaction can drive enough public benefit to outweigh any reduction in competition. The antitrust regulator has delayed its final decision until March next year, saying the deal is complex and it needs more time to assess the impact on both news content and the advertising market.
