Fairfax shareholders vote for Nine takeover deal

Majority of shareholders vote for the Fairfax-Nine merger even as 11-hour challenge comes from former Domain Group CEO, Antony Catalano

Fairfax Media has played down reports former Domain Group CEO, Anthony Catalano, has made an alternative offer for the business as shareholders throw their support behind the proposed historic merger with Nine Entertainment Company.

In a statement posted to the ASX today, the company confirmed it had received a letter from Catalano on 18 November, also circulated to media, which looked to threaten the controversial Fairfax-Nine merger at the eleventh hour. In the letter, Catalano said the merger was a poor deal, and did not realise the value of assets such as Domain.

According to media reports, Catalano offered to acquire up to 19.9 per cent of Fairfax at above market prices, saying he’d pursue a ‘multi-pronged strategy’ to generate more value for the publisher's shareholders by selling non-core assets, building the Domain franchises and pursuing other asset sales. Catalano abruptly left his post at Domain earlier this year, just two months after Domain listed on the ASX.

However, Fairfax this morning stated the letter contained no actual proposal that could be considered by shareholders as an alternative to the proposed scheme of arrangement put forward today for vote.

As of this morning, 81.49 per cent of shareholders approved the $4.2 billion takeover of Fairfax by Nine in one of Australia’s most historic media deals. The vote came a week after the Australian Competition and Consumer Commission (ACCC) gave the green light, even as the industry watchdog admitted the Fairfax-Nine deal is likely to reduce media competition.

In his presentation, Fairfax chairman, Nick Falloon, said the merger with Nine received overwhelming shareholder support and was now expected to be implemented on 7 December. The merger became a reality following Australia’s media ownership deregulation last year. Its final hurdle is securing Federal Court approval on 27 November.

Fairfax CEO, Greg Hywood, said it was a momentum day for Fairfax reflecting the next phase in its development.

“The support of shareholders recognises the great opportunity ahead and the work of everyone at Fairfax to put our company in this strong position,” he said. “The merger creates a powerful growth engine.

“The combine group’s increased scale of audiences and marketing platforms will drive value creation and delivers long-term benefits to shareholders. Our journalism is now on an even stronger and sustainable footing for the future.”

Hywood also emphasised Fairfax’s “proud history of independent journalism” and the group’s track record in terms of industry awards.  

“While it is the end of an era for the Fairfax corporate identity, independence is indelibly at the heart of our newsrooms and carries on into the future through our journalists. Our mastheads live and breathe the spirit of ‘Independent. Always’,” he said.

Despite Fairfax’s ongoing corporate and business challenges in the transformed media environment, Hywood said Fairfax’s business transformation strategy over the past seven years has created a stronger, digitally led business. He noted digital and non-print revenue now accounts for 40 per cent of total revenue. Domain has become a $1.4 million company, while Stan has built a subscriber base of 1.2 million consumers since launching four years ago, and $1 billion of net debt has been cleared.

“All this has put Fairfax shareholders in a position to benefit from the upside potential of owning close to half of the merged Fairfax and Nine businesses,” Hywood continued. “Our three publishing businesses are emerging from a period of great change. Each is profitable, generating valuable cash flows and positioned with distinct markets, products and strategy to leverage growth.”

“We are adamant believers in this merger, which we believe is the best opportunity for our journalists, and business and our shareholders,” Hywood added. “We identified this opportunity some time ago, which is why we lobbied so hard for the changes to the media ownership laws so that we could be standing here today.”

Nine CEO, Hugh Marks, welcomed the shareholder vote and cited it as the latest endorsement of the opportunities the merger presents.

"We are now working very hard to realise the cost synergies and explore revenue opportunities that will enable us to continue to invest in great Australian content and journalism," he said via a statement.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu 

 

 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

More Videos

More Brand Posts

What are Chris Riddell's qualifications to talk about technology? What are the awards that Chris Riddell has won? I cannot seem to find ...

Tareq

Digital disruption isn’t disruption anymore: Why it’s time to refocus your business

Read more

Enterprisetalk

Mark

CMO's top 10 martech stories for the week - 9 June

Read more

Great e-commerce article!

Vadim Frost

CMO’s State of CX Leadership 2022 report finds the CX striving to align to business outcomes

Read more

Are you searching something related to Lottery and Lottery App then Agnito Technologies can be a help for you Agnito comes out as a true ...

jackson13

The Lottery Office CEO details journey into next-gen cross-channel campaign orchestration

Read more

Thorough testing and quality assurance are required for a bug-free Lottery Platform. I'm looking forward to dependability.

Ella Hall

The Lottery Office CEO details journey into next-gen cross-channel campaign orchestration

Read more

Blog Posts

Marketing prowess versus the enigma of the metaverse

Flash back to the classic film, Willy Wonka and the Chocolate Factory. Television-obsessed Mike insists on becoming the first person to be ‘sent by Wonkavision’, dematerialising on one end, pixel by pixel, and materialising in another space. His cinematic dreams are realised thanks to rash decisions as he is shrunken down to fit the digital universe, followed by a trip to the taffy puller to return to normal size.

Liz Miller

VP, Constellation Research

Why Excellent Leadership Begins with Vertical Growth

Why is it there is no shortage of leadership development materials, yet outstanding leadership is so rare? Despite having access to so many leadership principles, tools, systems and processes, why is it so hard to develop and improve as a leader?

Michael Bunting

Author, leadership expert

More than money talks in sports sponsorship

As a nation united by sport, brands are beginning to learn money alone won’t talk without aligned values and action. If recent events with major leagues and their players have shown us anything, it’s the next generation of athletes are standing by what they believe in – and they won’t let their values be superseded by money.

Simone Waugh

Managing Director, Publicis Queensland

Sign in