Fairfax Media shareholders approve Nine merger

Fairfax shareholders have voted in favour of the proposed merger with Nine this morning, despite an eleventh-hour bid by former Domain CEO Antony Catalano.

At the Domain offices in Sydney, the majority of Fairfax Media shareholders showed support for the merger, which will see Nine acquire a 51.1% stake in the business. 81.49% were in favour of the merger, while 18.51% were against the deal.

Nine and Fairfax Media have passed the second hurdle

Proxies voted 94.2% for the scheme arrangement, which represented 66% of shareholders.

The vote comes two weeks after the Australian Competition and Consumer Commission said it would not object the merger. At the time, the ACCC said the deal would not significantly lessen competition in terms of advertising opportunities, or the creation and provision of news and non-news content.

Nine first launched its proposal to buy a majority stake in Fairfax Media on July 26, but has since been waiting on ACCC, shareholder and court approval.

The merger is set be completed by December 7, if court approval is granted on November 27. Catalano has flagged his intentions to dispute the merger in court, but should there be no complications, the first day of operating as a joint business will be December 10.

Under the proposed deal, Nine will acquire a 51.1% stake in Fairfax Media, with the Fairfax Media brand to be absorbed. Outside of the print mastheads Fairfax Media is known for, and the broadcasting arm of Nine, the combined entity will own businesses such as Stan, Domain, Pedestrian and CarAdvice. It will also have a majority share of Macquarie Media.

The shareholders voted in favour of the scheme arrangement

At the scheme meeting this morning, Fairfax Media chairman Nick Falloon said no other letter or proposal had been received, other than Catalano’s note last night, which he deemed wasn’t a “real proposal” for shareholders.

When asked about the future of the Fairfax Media brand and its mastheads, The Sydney Morning Herald, The Age and The Australian Financial Review, Falloon added: “The only way these brands will survive is if the business models survives, and it’s got it’s best opportunity for that to happen, in our view, in this merged vehicle.”

At Nine’s annual general meeting last week, CEO Hugh Marks – who will lead the combined business – pointed to the importance of a number of different Fairfax Media assets, including the print mastheads and the publisher’s 54.5% stake in radio business, Macquarie Media.

Marks predicts the publishing business will generate $500m in revenue annually.

At the company’s annual general meeting today, Fairfax Media’s CEO Greg Hywood said it was a “momentous day” for his business.

“The merger creates a powerful growth engine,” he said to shareholders at the AGM. “The combined group’s increased scale of audiences and marketing platforms will drive value-creation and deliver long-term benefits to shareholders.”

“Fairfax has a long, proud history of independent journalism. Although 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’.”

“Finally – and I make these comments assuming Federal Court will approve the merger – on a personal note, it has been an honour to hold my position for a few days short of eight years.

“I often say that we deliver a public good within a commercial model. That public good is that we ask questions of the institutions and people in power that they cannot or will not ask of themselves. This is the higher calling of our business. But it cannot be achieved unless it is underpinned by a robust business model,” he said.

Falloon and Hywood also responded to a number of shareholders concerns and questions around mastheads, quality of journalism and Nine’s experience in radio. Nine CEO Hugh Marks was seated at the back of the room for the duration of the scheme meeting.

Following the scheme meeting, Nine’s Marks said it was good to receive the votes in favour of the merger.

“There is strategic merit in putting the two businesses together. A lot of shareholders understand that,” he said.

“It’s exciting and again another step in what we are trying to do, which is to create a media company of the future, not one of the past, and as we go along that journey, people will realise how we are doing that.”

A Nine spokesperson added the business would work hard to realise the cost synergies and explore revenue opportunities.

“Nine welcomes the result of the Fairfax Scheme vote as an endorsement of the opportunities this merger presents for both companies’ shareholders, our collective staff and for our clients and partners,” the spokesperson said.

As of 11:45am today, Fairfax Media’s market capitalisation sits at $1.45b, while Nine’s market capitalisation at $1.46b. At close of business on the day of the initial announcement, Nine finished with a market capitalisation of $2.20b while Fairfax Media finished with a capitalisation of $1.77b.

The Nine and Fairfax Media details:


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