Last week NZME Limited (ASX: NZM) and Fairfax Media Limited (ASX: FXJ) announced a merger agreement between NZME and Fairfax New Zealand Limited. As part of the merger, NZM will acquire Fairfax NZ for a 41% shareholding in the combined entity and NZ$55m in cash. On a standalone basis, we believe NZME represents good value as it is trading at an attractive valuation. The potential merger with Fairfax Media will provide synergy opportunities and operational efficiencies that could drive earnings growth as a combined group in the future. Shares in NZME closed down 2.7% for the week and shares in Fairfax closed down 2.6%. We own NZME as a market-driven investment in the WAM Active and WAM Capital portfolios