DOMAIN'S SEPARATION FROM FAIRFAX COMPLETE AFTER COURT APPROVAL
6 November 2017, Written by Ben Hall
ONLINE real estate business Domain will become a separately listed company on the ASX within the next two weeks after the Federal Court approved its separation from Fairfax Media (ASX: FXJ).
Domain will trade with the ASX code 'DHA' from 16 November initially on a deferred settlement basis. Fairfax will trade on an ex-entitlement basis on the same day and the separation is expected to be formally implemented on 22 November.
Last week, shareholders voted in favour of the plan ahead of company's AGM in Sydney. It was carried almost unanimously and will give FXJ shareholders one share in Domain for every 10 shares they hold with Fairfax to retain a 60 per cent stake in the online real estate business.
Fairfax has been preparing for the separation of its lucrative Domain business from its loss-making newspaper and online news businesses since February. Domain's value was trimmed to $2 billion by Citi analysts in September because of debts and corporate costs including the salary of CEO Antony Catalano.
In July, US private equity raiders TPG and Hellman & Friedman pulled out of moves to acquire the media company, due to its unwieldy business model.
The board had unanimously recommended that shareholders voted in favour of the separation saying it represented the best outcome for shareholders.
"The separation of Domain reshapes the Fairfax portfolio by adopting a more flexible corporate structure to maximise shareholder value," chairman Nick Falloon says.
Media analysts say when Domain is spun-off, its relationship with its parent company will be similar to that between rival News Corp and ASX-listed property advertiser REA Group.
Domain will issue approximately 575 million shares when it lists on the ASX.
Business News Australia
Author: Ben Hall