February 4, 2018 / 10:09 PM / a year ago

UPDATE 1-NZME confirms appeal to High Court on Fairfax merger

(Adds background on deal, share movement)

Feb 5 (Reuters) - NZME Ltd, the owner of New Zealand’s top-selling newspaper, on Monday confirmed that it will apply for leave to appeal the high court’s decision to bar its merger with Fairfax Media Limited’s New Zealand unit.

The appeal by NZME and Fairfax to the High Court was heard in October after the Commerce Commission barred the deal in early May, after considering it for almost a year.

The owner of the New Zealand Herald said the court’s findings increased the range of estimated net benefits from the transaction to NZ$133 million ($96.92 million) to NZ$209 million, up from the NZCC’s estimated range of NZ$41 million to NZ$204 million.

NZME said the appeal to the country’s high court will focus on the issue of media plurality, which the court had considered to be outweighing the benefits of the merger.

Under the proposed deal, NZME would have paid NZ$55 million for Fairfax’s New Zealand operations and issued new shares to allow Fairfax to hold a 41 percent stake in NZME.

Due to rising competition for advertising dollars from online peers like Google and Facebook, the companies had said that combining their assets would have helped to cut costs by up to NZ$200 million over five years.

Shares of NZME were trading 1.2 percent lower at NZ$0.83 at 2203 GMT, while the main index was 1.3 percent lower.

$1 = 1.3723 New Zealand dollars Reporting by Sandhya Sampath in Bengaluru; Editing by Kevin Liffey and Daniel Wallis

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