DOMAIN SPIN OFF GETS THE GO-AHEAD FROM FAIRFAX SHAREHOLDERS
2 November 2017, Written by Ben Hall
FAIRFAX Media (ASX: FXJ) will spin off the jewel in its crown, real estate listings business Domain, after shareholders voted in favour of the plan.
The vote was taken ahead of the company's AGM in Sydney on Thursday and 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.
"This is an important milestone," chairman Nick Falloon says.
"Subject to shareholder approval of the capital reduction at the meeting today, and court approval, we expect Domain to commence trading on the ASX on 16 November 2017 on a deferred settlement basis," he says.
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," 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