NZME set out to ‘hurt’ Stuff

Media company NZME set out to harm its rival Stuff when it made a controversial announcement to the markets about its bid to buy its major competitor, a court has heard.

NZME took its bid to buy Stuff to the High Court at Auckland where it sought an emergency interim injunction to force Stuff’s Australian owner, Nine Entertainment, back to the negotiating table.

Nine turned its back on NZME negotiations because of the inevitable political and regulatory battle that would need to be fought if the merger was to go ahead.

NZME argues Nine has breached an exclusive agreement to explore the possibility of buying Stuff. Stuff argues there has since been a radical change in circumstances.

Yesterday’s hearing was in front of Justice Sarah Katz, with Jack Hodder, QC, representing NZME and John Dixon, QC, as counsel for Nine Entertainment.

Dixon told the High Court NZME’s decision to tell the NZX on Monday that it planned to buy Stuff for $1 was ‘‘utterly unnecessary’’.

‘‘There is no purpose to that announcement and no need for it under market rules. It is simply designed to hurt its competitor.’’

The announcement resulted in an approach to NZME from NZX Regulation, after Nine said the talks were off.

Dixon said Nine called off the negotiations after a drastic change in circumstances.

That included barring NZME from having access to its accounts and other data.

‘‘Really what they want is to get inside a business that they can’t acquire,’’ Dixon said.

The legal action comes as the coronavirus crisis piles pressure on media businesses which have struggled to replace advertising revenues lost as a result of the growth of the internet. Justice Katz reserved her decision on the matter but hoped to issue it on Monday.