APN shareholders vote overwhelmingly for NZ demerger

The first formal step towards the merger of NZME and Fairfax Media’s New Zealand assets was taken today with close to an unanimous vote from shareholders in support of a demerger of NZME from APN News & Media.

APN said the vote in favour of the demerger came in at 99.98 per cent at the company’s annual general meeting.

Under the deal, APN shareholders will receive new shares in NZME in proportion to their existing APN shareholding, while retaining their existing APN shares.

APN will remain listed on the ASX and NZX, and will undertake a 1 for 7 share consolidation.

A $182 million capital raising announced with the NZME demerger plans last month was well supported by the company’s institutional shareholders, the meeting was told.

Earlier in the week, the New Zealand Commerce Commission outlined competition concerns over the proposed merger – with the main focus being on online presence and an overlap of Sunday newspaper circulation.

The publishers have submitted that in most regions there is no crossover in paid daily newspaper circulations, although there are small pockets of common circulation in the Waikato and Hawkes Bay areas.

However, the NZME-Fairfax submission acknowledged some overlap between the publishers’ Sunday papers. NZME’s The Herald on Sunday has its primary circulation volumes in Auckland, but there is some crossover with Fairfax’s Sunday Star Times.

In the online provision of news and information, there is notable overlap between NZME’s nzherald.co.nz and Fairfax’s stuff.co.nz. However, the publishers argue those sites compete for consumers with strong local and global content providers.

Locally these include TVNZ’s One News Now (www.tvnz.co.nz/one-news), MediaWorks’ Newshub (newshub.co.nz), Radio New Zealand (rnz.co.nz), NBR online (nbr.co.nz), ODT online (odt.co.nz) and the Spinoff (spinoff.co.nz).

Concerns on print overlaps largely can be addressed by the publishers, but the commission will need to determine whether competition online is sufficient to allow for the combination of the two major NZ players.

The publishers argue the merger will create a dominant NZ multiplatform media company that can fight off the challenges presented in domestic markets by international giants such as Facebook and Google.

The commission said it would assess the extent to which advertisers had a preference for specific media for specific needs, and the extent to which they would switch among them. “For example, the extent to which an advertiser would utilise Google or Facebook services as opposed to stuff.co.nz or nzherald.co.nz.” it said.

The commission is looking to complete its review by August 22 which, if it gives the green light, would allow the two companies to complete the merger before the end of the year.

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