NZME and Stuff have announced they will seek leave to appeal a High Court ruling that upheld a Commerce Commission block on their proposed merger.
The High Court in December upheld a Commerce Commission ruling in May not to clear or authorise the merger.
NZME says in a sharemarket announcement that the NZX-listed company, Stuff and Stuff’s Australian owner Fairfax Media, would focus their appeal on the issue of media plurality (or media diversity), which was central to the commission’s concerns about the deal.
Investment manager Paddy Walker says the company hoped the Court of Appeal would hear its appeal during the first half of this year and that it would get a decision during the second half of the year.
NZME says although the High Court sided with the competition watchdog, it revealed the commission had "significantly understated the quantifiable public benefits from the proposed merger".
"After careful review and analysis of the High Court’s reasons, the companies continue to believe that the commission was wrong in fact and wrong in law to decline clearance or authorisation of the merger," NZME says in a statement to the NZX.
"The High Court’s findings increase the range of estimated quantifiable net benefits to the public arising from the transaction to $133 million to $209m, up from the commission’s estimated range of $41m to $204m; however the High Court still found that these benefits were outweighed by the expected loss of plurality in the media."
Given the "potentially significant benefits from the merger", NZME is of the view that appealing the High Court decision is in the best interests of NZME, its shareholders and consumers, the company says.
Stuff – previously called Fairfax Media NZ – publishes Stuff and about 60 print publications, including The Sunday Star-Times, The Dominion Post and The Press. It also owns community website Neighbourly and a 49 per cent share of internet provider Stuff Fibre.
NZME’s major assets include The New Zealand Herald, about half the country’s commercial radio stations, and daily deals site Grab One.
NZME shares fell one cent to 83c in the wake of the announcement.