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Fairfax readies for Domain partial float

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Fairfax Media will follow last week’s release of details of the planned partial float of real estate arm Domain with an investor roadshow that is expected to include New York, Hong Kong, New Zealand and Australia.

The company released a 221-page document to the Australian Securities Exchange late on Thursday, outlining the company’s plans for the separation of the Domain Group.

Domain will be launched with net equity of $1.7 billion and an enterprise value of $1.85 billion. The separation will see Fairfax emerge with a 60 per cent stake in Domain worth around $1 billion.

While Domain will be taking on around $155 million in debt, Fairfax will emerge from the exercise with much a reduced debt level.

The remaining 40 per cent of Domain will be held by existing Fairfax shareholders who will each receive one Domain share for every 10 Fairfax shares.

Fairfax shareholders will vote on the Domain separation at the publisher’s annual general meeting on November 2. Domain plans to begin trading on the ASX on November 23.

As of last week, Domain’s digital revenue was up 22 per cent in 2017-18, while total revenue has grown 13 per cent. In the previous financial year, Domain total revenue grew 8 per cent and digital revenue lifted 19 per cent.

The ASX document revealed details of the proposed Domain board, which will include former REA Group chief executive Greg Ellis. Mr Ellis is chief executive of Scout24, a German classifieds company owned by private equity firm Hellman & Friedman. He was also a member of the H&E team that considered a bid for Fairfax Media earlier this year.

As revealed at the Fairfax’s full-year results meeting last month, Fairfax chairman Nick Falloon also will be chairman of Domain. Other board members include Domain chief executive Antony Catalano, former REA director Diana Eilert, former chief financial officer at Crown, Publishing & Broadcast Limited and Woolworths Geoff Kleemann, Fairfax general counsel Gail Hambly and Metcash, Woolworths South Africa director Patrick Allaway.

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