Fairfax Media, which plans to merge its New Zealand media business with rival NZME, has confirmed speculation it has been approached by a third party interested in buying its New Zealand unit, but says it is not in talks with the potential buyer.
Sydney-based Fairfax and Auckland-based NZME want to merge their businesses — a move the anti-trust Commerce Commission rejected in a draft determination last month, citing potential loss of media plurality. The National Business Review yesterday reported Fairfax had been offered between $100million and $120million for its New Zealand business by an unidentified buyer if the proposed merger with NZME fell through. That figure is about double 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 yesterday.
"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 [merger implementation agreement], 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 A86.5c on the ASX, and have shed 6% this year. NZME shares last traded at 55c on the NZX, and have dropped 31% this year.
