Fairfax to go in Nine deal

Nine has made a bid to buy Fairfax, under which Nine shareholders would own 51.1 per cent of the merged business, which would operate under the Nine name.


The Fairfax name is set to go in the deal, while Domain and shared entity Stan will be majority-owned by Nine. All of Fairfax’s print assets will be owned by Nine.


The Nine CEO, Hugh Marks, will lead the merged business, with three Fairfax directors joining the board. It will be chaired by current Nine chairman, former treasury Peter Costello, and also include two more directors from Nine.


Fairfax has said it expects to achieve $50m in cost savings over two years, but has not elaborated on where they will come from.


Australian Printer contacted Fairfax to ask on what the deal would mean for its print divisions, and workers, but did not receive a response.


Last week, 120 staff across its printing sites were informed they would be losing their jobs as it announced plans to share its print works with long-time rival News Corp, with few opportunities left in the country for newsprint workers. As part of the arrangement Fairfax closed its Beresford, Newcastle facility along with its Orminston, Brisbane site.


The AMWU has warned against offshoring of positions in the print divisions of Fairfax, calling for any efficiencies gained from the merger to not come at the expense of further reductions in the quality of print journalism.


Lorraine Cassin, AMWU print secretary says, “We accept that the media landscape and consumer behaviour is changing, however, responses to these changes should not come at the expense of good quality news.


“Just because the name Fairfax is gone, it does not mean that the important role of print journalism should go with it. Every job lost or the outsourcing of services by sending them offshore means tighter deadlines and less time for quality control.


“We intend to work with management to ensure a viable industry into the future that will continue to deliver quality news.”


Greg Hywood, CEO, Fairfax says, “It is an important day for the media in this country. Over the last eight years Fairfax Media has transformed.


“When Nine approached us with what we believe is a compelling proposal, we knew it made sense to address it.


“Everyone in the industry since legislation changed last year has been having talks.


“It is the best decision for our employees and shareholders. Our journalism, Stan, and Domain, will make the combined entity a media company to reckon with.


“Nine, like us, has a long tradition of quality journalism. The merged business will have plenty of Fairfax on the board.”


Under the proposed transaction, Fairfax shareholders will receive 0.3627 Nine shares for each Fairfax share held, and a $0.025 cash consideration per Fairfax share.


The aggregate consideration implies a 21.9 per cent premium to the 25 July closing price of Fairfax shares, $0.770, and a 22.6 per cent premium to Fairfax’s one month VWAP to July 25 of $0.766.


Comment below to have your say on this story.

If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.  

Sign up to the Sprinter newsletter

Leave a comment:

Your email address will not be published. All fields are required


Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.