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Fairfax-Nine merger approved by Federal Court

Fairfax Media shareholders have voted in favour of a merger with Nine Entertainment, despite a last-minute attempt to block the deal by former Domain chief executive Antony Catalano.

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Update: November 27 2018 

The Federal Court has approved Nine Entertainment’s takeover of Fairfax. The merger is expected to be completed by early December.

The share price for Nine Entertainment fell 0.3 per cent after the court’s decision, while the Fairfax price stayed at 63.5 cents.

 

November 19 2019

More than 81 per cent of shareholders voted in favour of the merger, which will establish a media company to rival the scale of News Corp Australia.

The merged company will combine an array of quality assets, ranging from well-established print, free-to-air television, radio and digital businesses, as well as the Domain Group real listings business and full ownership of the Stan streaming service.

The Australian Competition and Consumer Commission approved the transaction earlier this month, on the basis that the growth in online news provided necessary competitive restraint.

The Fairfax board struck down an attempt by Mr Catalano to stop the merger through an offer outlined in a letter to Fairfax chairman Nick Falloon on Sunday night.

Mr Catalano wanted the shareholder meeting delayed to consider his proposal, which involved the acquisition of up to 19.9 per cent of Fairfax shares and the provision of an alternative asset management strategy that would see the sale of non-core assets to return cash to shareholders. The offer was conditional on the merger being defeated, as well as being given a seat on the Fairfax board.

The board said this morning Mr Catalano’s letter “did not constitute a superior proposal”.

The merger still requires approval from the Federal Court on Tuesday, November 27, although Mr Catalano has threatened to challenge the deal in court.

Mr Falloon said the merger brought together two largely complementary businesses to create a diversified portfolio of media assets.

“The at-scale creation of content and access to audiences, premium brands and data across this portfolio are expected to underpin the combined group’s ability to compete in the changing media market and deliver value for shareholders,” he said.

Mr Falloon also pointed to the fact the new entity would be in a strong financial position to allow it to invest in its portfolio as well as external opportunities.

Once the Federal Court approves the arrangement, the new company, to be called Nine, will begin operation on Monday, December 10. Nine CEO Hugh Marks will be its chief executive.

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