NZME Ltd [NZX:NZME] has experienced a growth spurt of 3.70% today. This happened as unexpected news emerged, encouraging bullish trading.
NZME — short for New Zealand Media and Entertainment — has a strong presence on the country’s media landscape. It runs popular outlets like The New Zealand Herald and Newstalk ZB.
At the time of writing, the company has a market capitalisation of $82.32 million, and the share price sits at $0.42.
Why has the [NZX:NZME] share price increased today?
Favourable reports of a potential corporate merger have buoyed market sentiment.
Here are the key highlights:
- NZME is pushing for a renewed effort to take over its rival, Stuff Limited.
- Merging the assets of these two companies could create positive synergy. In particular, this could save a number of regional Kiwi newspapers that have been suffering from declining profitability in recent years.
- Winston Peters has declared that NZ First would be keen to support an NZME-Stuff merger under a ‘Kiwishare’ model.
This news has given rise to a bullish response, leading to a buy-in for NZME shares.
Where could [NZX:NZME] go from here?
The Commerce Commission previously rejected an NZME-Stuff merger in 2017. They feared that such a move could compromise editorial diversity and independence in New Zealand.
However, there is hope that a breakthrough might be achieved on the regulatory front, especially with vocal support coming from NZ First.
Still, it’s important to note that what NZ First has indicated is merely symbolic at this point. No concrete commitments are in place just yet.
There remains no easy route to achieving an NZME-Stuff merge.
For now, it’s merely a case of wait and see.
Regards,
John Ling,
Contributor, WealthMorning.com