TPG might be trying to bluff its way into the Fairfax Media boardroom, in order to obtain the Domain property website business on the cheap — but there are growing signs there could be good news from the other side of the Tasman, where Fairfax and NZME (the NZ print and radio arm of APN) are trying to merge. Fairfax shares jumped to a new six-year high of $1.14 yesterday, before easing to close up at $1.095, after reports about the TPG move in the Financial Review. More than 20 million shares were traded, taking the three-day volume to well over 56 million.

Part of yesterday’s gain for Fairfax Media shares was undoubtedly down to the TPG story — but, equally important is that the story across the Tasman seem to be changing, which may also assist the merger. That’s something media reports this morning have missed.

In fact, shares in NZME, the APN associate, have risen more than 19% in the last month — and there’s a growing belief that New Zealand’s competition regulator, the Commerce Commission, might reverse its strong opposition to the NZME merger with Fairfax’s NZ operations. 

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The proposed merger would have Fairfax emerge with a 41% stake in the combined company and NZ$55 million (A$53 million) in cash. The Commerce Commission was expected to give its final decision — a “no” — on March 15 (which was originally extended from late last year). Then, they extended it to April 11 — and now, just yesterday, they further extended the deadline to May 2. 

The delay has fuelled speculation the Commerce Commission may be seriously considering approving the merger, after indicating in a draft decision last year that it would reject it because of concerns about the impact on media diversity. The media companies have argued that diversity is the lesser of any evils from the merger — far more important, they argue, is keeping publications open and people employed. Fairfax’s new radical changes to the Marlborough Express in the South Island hint at what this jobs threat could mean. 

Don’t be surprised if this isn’t repeated in some of Fairfax’s other regional dailies in New Zealand. But it looks like the same sort of idea that the Chris Jansz, new digitally focused head of Fairfax’s Australian publishing operations, may introduce in some regional Australian dailies and weeklies. — Glenn Dyer


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Peter Fray
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