Sale rumours swirl after media merger denied

Takeover rumours are swirling in the wake of the competition watchdog’s decision to block Fairfax New Zealand and NZME’S proposed merger.

Australian firm Southern Cross Austereo is believed to be considering making a bid for NZME’S radio business, the Australian Financial Review reported.

There has also been speculation that Mediaworks’ United Statesbased owner, Oaktree Capital Management, could make a bid for Fairfax NZ, or alternatively that Mediaworks’ television business could be acquired by NZME.

Television New Zealand chief executive Kevin Kenrick agreed it was ‘‘a fairly reasonable assumption’’ that the Commission Commerce might be reluctant to approve any media takeovers that strongly tilted the field between Fairfax NZ and NZME.

‘‘They have [in the ruling] identified plurality of news and different editorial opinions as something they are concerned about.’’

Mediaworks said in a statement last week that it hoped the commission’s refusal to authorise NZME and Fairfax NZ’S proposed merger would ‘‘open the door for other opportunities’’.

However, Kenrick said that if there was a possibility of TVNZ and Mediaworks combining, that was now looking less likely.

‘‘The Commerce Commission approaches these things on a caseby-case basis, but you would have to say the decision they have made is precedent-setting and there is a pretty clear message in there.’’

But buying Mediaworks’ television business would not be without commercial challenges for NZME, Kenrick believed.

‘‘When you look at the Mediaworks business, from what I understand there is a reasonable number of potential buyers of their radio assets, but there is not a long queue that is showing up to buy those TV assets right now.’’

Oaktree appears to have pumped $39m into Mediaworks since December 2015. The last multimillion-dollar injection in April was to pay for its launch of The AM Show and The Project, the rebranding of TV3 into Three, and sales training.

The AFR reported that Southern Cross Austereo had previously made an approach to NZME about its radio business but was unable to enter into discussions because Fairfax and NZME were locked in exclusive negotiations over their proposed merger.

Fairfax and NZME have yet to decide whether they will appeal the commission’s ruling.