Fairfax wants spin-off

Domain plan revived as suitors back out

FAIRFAX Media will push ahead with plans to spin-off its lucrative property portal Domain after two suitors withdrew their takeover interests in the company.

The media group, which owns metropolitan newspapers and radio networks, also announced that its overall revenue had fallen six per cent in the second half of the financial year. Fairfax said private equity groups TPG and Hellman & Friedman have pulled out of making bids for the media company because of the group’s complex business model.

Chairman Nick Falloon said that, after receiving a letter from Hellman & Friedman on Friday saying it would not make a bid for the media business, Fairfax had talked with TPG at the weekend.

“It appeared that the complication of our business was such that they (TPG) didn’t want to bid for the whole business. That’s the reading we got from that,” Mr Falloon said during an analyst briefing yesterday morning.

He said the company will now push ahead with its original plan, made before the unsolicited takeover bids, to spin off its property classifieds business Domain into a separate ASX-listed entity.

Fairfax’s spin-off plan, as announced in February, includes holding onto between 60 and 70 per cent of Domain.

Mr Falloon said the company had made progress with regulatory approvals and was on track to separate Domain Fairfax Media Chairman Nick Falloon commenting during an analyst briefing yesterday by the end of 2017 with a progress update at its full-year results on August 16.

Domain’s second-half revenue was up 10 per cent with revenue in its digital business up 22 per cent, the company said.

While revenue from the group’s print and online metro news division dropped about 12 per cent, its Australian community media business was off 11 per cent, its New Zealand media business declined by about four per cent and Macquarie Media was down five per cent.

Fairfax said it expects earnings of between $262 million and $266 million for the year to June 30, compared to $283.3 million in the prior year.

TPG and Ontario Teachers’ Pension Plan Board made a bid for Fairfax in May, initially offering 95c a share.

It appeared that the complication of our business was such that they (TPG) didn’t want to bid for the whole business. That’s the reading we got from that.