Nine Entertainment Co. is reportedly selling Stuff, its publishing business based in New Zealand, in a management buyout worth $NZ1 to Sinead Boucher, chief executive.
The Australian publicly traded media company will retain the ownership of the print plant in Petone, Wellington, which will be subsequently leased back to Stuff. The company will also obtain the proceeds of 25% from the sale of the internet business, Stuff Fibre & further 75% in the next 3 years, depending on the ability to raise funding by Stuff.
Ms. Sinead Boucher has stated that the recent buyout will cater to the New Zealanders who look for national and local news and entertainment services, through the local ownership of the business. Hugh Marks, chief executive of Nine, also stated that the ownership of Stuff by Ms. Boucher would result in gaining more customers and competitive advantage for the New Zealand market.
Ma. Boucher added that she spoke to Hugh Marks when it became clear that the NZME bid would not progress. She had a discussion regarding the management buyout of Stuff with the Nine chief executive. She further informed of her plan to form an ownership model that will offer a shareholding stake to its staff in the business.
In 2018, Nine acquired Stuff in its merger with Fairfax Media and has been trying to sell the business since the beginning of 2019. Fairfax had previously tried to offload the publishing business to NZME, the media company. However, the merger plan for $NZ55 million was blocked by the court of appeal in New Zealand. An injunction to preserve Nine and NZME’s exclusive negotiation was also declined last week.
2018-19 financial results of Nine highlights the challenging nature of the New Zealand market. There was a 10% decline in Stuff’s revenue to $252.7 million, and a drop in earnings by 24% before tax, depreciation, interest, & amortization to $28 million.
The transaction of the recent deal will reportedly conclude by 31st May.
Source credit: https://www.smh.com.au/business/companies/nine-to-sell-nz-publishing-business-stuff-in-1-management-buyout-20200525-p54w02.html