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Fairfax confirms approach for NZ unit

NZ Newswire logoNZ Newswire 8/12/2016 Tina Morrison
Fairfax © Getty Fairfax

Fairfax Media, which plans to merge its New Zealand media business with rival NZME, confirmed speculation it had been approached by a third party about the acquisition of its New Zealand unit, but said it's not in talks with the potential buyer.

Sydney-based Fairfax and Auckland-based NZME want to merge their media businesses, a move the anti-trust Commerce Commission rejected in a draft determination last month, fearing loss of media plurality.

The National Business Review on Thursday reported Fairfax had been offered between $100 million and $120m by an unidentified buyer for its New Zealand business if the proposed merger with NZME fell through, which represented a multiple of about two times Fairfax NZ's annual earnings before interest, tax, depreciation and amortisation.

"Following media speculation today, Fairfax confirms that it has recently received a letter from a third party claiming that it has a client that would be interested in considering the acquisition of the Fairfax New Zealand business," Fairfax said in a statement to the ASX.

"The name of the client is not disclosed. The letter contains no offer capable of acceptance and Fairfax is not engaged in any discussions in relation to the letter."

Fairfax said it had a binding merger agreement with NZME, which included exclusivity provisions preventing either party from entertaining any offer from a third party in relation to the business and assets.

"Consistent with its exclusivity obligations under the MIA, Fairfax is continuing to work with NZME to satisfy the conditions under the MIA and is not engaged with any third party," the company said.

Shares in Fairfax last traded at 86.5 Australian cents on the ASX, and have shed 6 per cent this year. NZME shares last traded at 55 cents on the NZX, and have dropped 31 per cent this year.

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