Nine, Fairfax announce $4.2B proposed merger

By @chelean on
The logo of Nine Entertainment Co Holdings Ltd can be seen on display outside their Sydney headquarters in Australia, July 26, 2018.
The logo of Nine Entertainment Co Holdings Ltd can be seen on display outside their Sydney headquarters in Australia, July 26, 2018. Reuters/David Gray

Nine Entertainment and Fairfax Media Limited have announced their plans to merge into one company simply called Nine. Under the proposed transaction, Nine will be the dominant partner with its shareholders owning 51.1 percent of the new company’s shares.

The $4.2 billion merger will also see current Nine chief executive Hugh Marks and chairman Peter Costello leading the pack. Fairfax will have three directors to a board of six.

The combined company will include Nine’s free-to-air television, as well as its digital businesses including Domain, Stan and 9Now, and the Fairfax’s newspapers and online publications and its Macquarie Media radio interests.

“The scope of this deal is genuinely breath-taking,” Marks wrote an email to Nine staff. “The ground-breaking merger — harnessing the strength, assets, quality and reach of two of the country ’ s most famous industry brands — is another highly significant step in the evolution of Nine ’ s business into one of the most powerful media organisations in the country. ”

FILE PHOTO: A man arrives at the Fairfax Media building in Sydney, Australia, February 20, 2018. FILE PHOTO: A man arrives at the Fairfax Media building in Sydney, Australia, February 20, 2018.  Reuters/Daniel Munoz/File Photo

Fairfax’s Nick Falloon, meanwhile, said the proposed merger provides an “ exciting opportunity ” for shareholders. Its directors have unanimously recommended the deal.

“ The Fairfax Board has carefully considered the Proposed Transaction and believes it represents compelling value for Fairfax shareholders. The structure of the Proposed Transaction provides an exciting opportunity for our shareholders to maintain their exposure to Fairfax ’ s growing businesses whilst also participating in the combination benefits with Nine, ” Falloon said.

Fairfax CEO Greg Hywood also said that the company, whose net profit after tax was down 9.9 percent in the six months to December 2017, has been “ at the mercy of the non-stop global media revolution to being best of its breed. ” He assured staff that it would be business as usual as they make the move to a merged media company.

The publisher’s shares were at $.077 prior to the announcement of the deal, while Nine’s were trading at $2.52. Fairfax has a current value of  $1.77 billion, while the broadcaster has a current value of $2.2 billion. The merger is expected to be completed by the end of the year.

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