Fairfax Media set to spin off Domain with company in trading halt

Fairfax Media looks set to spin off Domain as a separately listed entity on the Australian Securities Exchange with the publishing company entering into a trading halt this morning.

A request issued to the ASX today stated: “In accordance with Listing Rule 17.1, Fairfax Media Limited [ASX: FXJ] requests that its securities be placed into an immediate trading halt pending an announcement in relation to the Domain Group.”

Fairfax Media shares will remain in a trading halt session state until the commencement of normal trading on Thursday or when the announcement is released to the market.

Mumbrella understands the separately-listed Domain vechicle will be a Fairfax-controlled entity, with a stake of between 60-70% in the company.

The trading halt comes ahead of tomorrow’s financial results for the six months to December 31 announcement for the company which publishes The Sydney Morning Herald, The Age and The Australian Financial Review.

The Australian Financial Review is reporting current Domain boss Antony Catalano will run the separately listed vehicle.

Ahead of the publishing company’s financial results announcement in August last year it split Domain Group away from its Australian Metro Media division, fuelling speculation that a Domain float was on the cards.

At the end of last year,  Catalano said there was “no need” for the real estate business to float separately. Catalano’s comments reference Fairfax Media selling off their majority stake in the business while the expected spin-off of Domain will see Fairfax retain a 60-70% stake.

The spin-off of Domain as a separately-listed entity will still see Fairfax maintain a majority stake while Catalano’s comments reference the potential sellling-off of Domain.

Speaking to Mumbrella at the time, Catalano said: “When you have a business that is growing as quickly as Domain is growing then we have an obligation to our shareholders to realise the value of this business.

“Fairfax is never going to float this business when so much of the value still hasn’t been realised. We’ve said publicly this is a business we expect to grow from $120m EBITDA to somewhere in excess of $200m EBITDA over the next two to three years.

“When there is that kind of profitability and growth still to come, why would you float it? The share holders of Fairfax are entitled to realise the potential of this business.”

A Fairfax Media spokesperson declined to comment.


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