Approval means end for Fairfax

FAIRFAX Media will cease to exist as an independent company next month after shareholders backed a $4-billion buyout offer from Channel 9’s parent company.

At a meeting of Fairfax investors yesterday, 81.49 per cent of votes were cast in favour of the deal.

It came after one-time senior Fairfax executive Antony Catalano made an 11th-hour bid to build a controlling stake in the publisher in order to block the buyout.

Fairfax chair Nick Falloon told investors ahead of the vote that for the deal to proceed, most Fairfax shareholders would need to vote in favour.

At least 75 per cent of the total votes would also need to be cast in favour, he said.

The deal will now head to court for approval on November 27, and the merger is set to be completed on December 7.

Shares in the enlarged company will start trading on the Australian Securities Exchange on December 10.

Nine shareholders did not need to vote on the merger as the broadcaster will own 51.1 per cent of the enlarged group. Fairfax shareholders will own the other 48.9 per cent.

The move by Mr Catalano – who sensationally quit early this year as chief executive of Fairfax’s majority-owned digital real estate business Domain – came just before Fairfax shareholders voted.

In a letter to Mr Falloon on Sunday night, Mr Catalano proposed acquiring a stake of

up to 19.9 per cent in Fairfax Media “at a price superior to the intrinsic mark-to-market value of (Nine’s proposal) of up to 65c per share”.

Shares in Fairfax had closed on Friday at 61.6c.

Mr Catalano, who owns a 1.2 per cent stake in the company, had also called on Fairfax to appoint him to the board, effectively overseeing his former chief executive, Greg Hywood.

In a statement early yester- day, Fairfax said Mr Catalano had not made a superior proposal to that from Nine, “and therefore the Fairfax board is unable to consider it”.

Mr Catalano had hit out at the planned Nine buyout, saying it undervalued Domain.

More than $740 million in value had been lost since the planned merger was announced in July, he said.

Billionaire investor Alex Waislitz, who holds about 2 per cent of Fairfax stock, had said he planned to vote against the merger.

Nine chief Hugh Marks, who attended the Fairfax shareholder meeting yesterday, will take the helm of the enlarged company, to be called Nine, next month.

At Fairfax’s annual meeting, which was held before the vote on the buyout, Fairfax chief Greg Hywood said it was a “landmark day”.

Nine’s biggest shareholder, billionaire tycoon Bruce Gordon, had vowed to maintain a stake of as much as 14 per cent in the enlarged media company, saying “personally, I think it will be a very, very good thing for both companies”.

The merged company would own Nine’s free-to-air television network plus Fairfax’s Australian and New Zealand mastheads, including The Age, The Sydney Morning Herald and The Financial Review.

It would also own Fairfax’s majority stake in Domain and 54.5 per cent shareholding in listed radio network Macquarie Media, home of Melbourne’s 3AW and Sydney’s 2GB radio stations.