Domain to be passed to Nine under Fairfax takeover

The deal will also see the end of Fairfax Media as the merged company will be called Nine and will be led by Nine’s current CEO, Hugh Marks.

Mr Marks confirmed earlier today that the primary motivators for the takeover was acquiring the Stan and Domain assets.

Mr Marks said that there would be savings of at least $50 million over two years and that the merger would add a new dimension to Nine’s offering.

“This merger with Fairfax will add another dimension, creating a unique, all-platform, media business that will reach more than half of Australia each day through television, online, print and radio,” Mr Marks said.

Along with Domain, Nine will gain control of streaming service Stan, Fairfax mastheads including The Age, The Sydney Morning Herald, regional mastheads and other Macquarie Media properties.

It was reported last year that US private equity firm TPG was bidding to buy Fairfax but primarily so they could own the lucrative Domain business.

TPG withdrew their bid and the other firm in the running, Hellman & Friedman failed to lodge a bid in time which led Fairfax to continue its original plan to spin off Domain.

Domain launched on the ASX in November last year with Fairfax owning 60 per cent and the remaining 40 per cent to be divided amongst existing shareholders.

Upon announcement of the takeover this morning, Domain shares jumped up 7.5 per cent to $3.30 and continued to rise throughout the day.

Fairfax CEO Greg Hywood said the deal reflected the success of Fairfax’s programs in creating value for shareholders.

“The Proposed Transaction for Fairfax reflects the success of Fairfax’s transformation strategy which has created value for shareholders through targeted investment in high growth businesses, such as Domain and Stan, and prudent management of our media assets,” he said.

The $4 billion merger is reported to be around a 22 per cent premium to Fairfax’s closing price of 77 cents yesterday and the directors have unanimously recommended the deal to shareholders.

Fairfax reported a 54 per cent fall in half-year net profit at the beginning of the year and there had been reports of them looking for a buyer for the business.