Sky TV files merger ruling appeal

Sky Network Television and Vodafone New Zealand have filed High Court papers appealing the Commerce Commission’s decision to refuse clearance for their proposed merger.

The move is intended to keep their options open ahead of a legal deadline for an appeal, and the companies have yet to say whether they will follow through with an actual court case.

Sky spokeswoman Kirsty Way said the High Court papers did not set out what the companies’ grounds for appealing the ruling might be.

Sky explained in a statement to the New Zealand stock exchange that the companies had triggered the appeal to avoid the risk of foreclosing their appeal rights, while they waited for the competition watchdog to release its detailed reasoning for its ruling.

The Commerce Act says companies have only 20 working days to appeal a merger ruling through the courts, and that deadline was set to expire today.

But the Commerce Commission has not yet finalised a date for publishing the reasoning for its ruling, which the companies would need to review to see if there might be a basis for an appeal.

Sky and Vodafone are understood to have been surprised by the commission’s decision to reject the merger last month. The ruling saw almost $300 million wiped from Sky’s share price.

But competition lawyer Andy Matthews has warned that overturning the ruling through the courts would be a challenge.

He saw no obvious grounds for an appeal as yet, and said the courts were increasingly inclined to defer to ‘‘expert regulators’’ such as the commission.

The commission had said it would have exercised discretion not to object to an appeal even if one hadn’t been filed until 20 working days after it released its decisions for its ruling.

However, the decision on whether to allow an appeal after today’s deadline would ultimately have been down to the High Court.

Sky explained in a release to the NZX that the companies had filed appeals ‘‘within the statutory time period for an appeal in order to preserve their rights’’, while they waited for the opportunity to assess the Commerce Commission’s reasons for its decision.