Australia’s Nine Entertainment Company and Fairfax Media have received approval from The Federal Court of Australia Tuesday (Nov.27) to proceed with their planned AUS$4 billion (US$3.1 billion) merger in December, making it the largest independent media company in the country.
The approval comes four months after news broke of the potential merger between the two companies. The Australian Competition and Consumer Commission cleared the deal in early November.
Minority Fairfax shareholder and former Domain head Antony Catalano attempted to block the deal, stating that Fairfax’s board did not give its shareholders time to consider his proposal at the company’s annual general meeting.
On Nov.19, Fairfax released a statement saying they had received a letter from Catalano but it contained no proposal that “could be considered” by Fairfax shareholders as an alternative to the proposed deal with Nine Entertainment.
Catalano had offered, in a letter to Fairfax chairman Nick Falloon, to buy up to 19.9% of the company’s shares and to sell off its non-core assets, reports Fairfax paper The Sydney Morning Herald.
According to reports, Catalano’s counsel told the court that Fairfax shareholders were being “short changed” by $600 million because the share price of Nine has dropped “significantly” since the proposed merger was announced.
Justice Jacqueline Gleeson noted that the merger should proceed as “there was no good purpose in providing that [Catalano's bid] to shareholders or delaying the shareholders meeting in order to address that.”
Catalano’s legal team has said it may appeal the decision.
On Nov. 19, over 80% of Fairfax shareholders agreed to the merger with the Australian broadcaster.
Fairfax chairman Nick Falloon said in a statement: “Fairfax shareholders have voted overwhelmingly in favour of the proposed Nine merger. Our shareholders clearly see the potential of maintaining their shareholding in Fairfax’s growing businesses while participating in the combination benefits with Nine. We believe the merged businesses will deliver a stronger, digitally-focused media organisation with a compelling multi-platform audience reach.”
The results of the merger will see Nine shareholders owning 51.1% of the new venture with Fairfax shareholders owning the remainder.
The deal combines under one entity Nine’s television network and Fairfax newspapers and its various radio and digital assets.
The company will be known simply as Nine and will be up and running on Dec. 10.
Nine CEO Hugh Marks (pictured) and Nine chairman Peter Costello will lead the company. Fairfax CEO Greg Hywood will depart from his position once the deal is completed.