On 19 November 2018, Fairfax Media Limited (ASX: FXJ) responded to the media reports relating to a letter received from Antony Catalano late on 18 November 2018 and later released by him to the media. As per the companyâs response which was released on ASX, the letter does not constitute a Superior Proposal under the terms of the Scheme Implementation Agreement between Fairfax and Nine Entertainment Co. Holdings, and therefore it cannot be considered as an alternative to the proposal of Nine Entertainment.
On 26 July 2018, Fairfax and Nine Entertainment announced that they had entered into an agreement by which Nine proposes to acquire 100% of outstanding Fairfax Shares through a Fairfax scheme of arrangement. If the Scheme is approved and implemented, eligible Fairfax shareholders will receive 0.3627 New Nine Shares in addition to 2.5 cents in cash for each Fairfax Share held.
Through this scheme, the combined group will be able to create a diversified portfolio of media assets, comprising Fairfaxâs mastheads, Nineâs FTA TV network, high-growth digital businesses including Domain, Stan and 9Now, as well as radio interests through Macquarie Media. The combined groupâs strong financial position will provide flexibility to pursue strategic investment in its portfolio and to explore market opportunities as and when they arise.
After providing the response, the Fairfax board proceeded with this Federal Court ordered Scheme Meeting, and it was later announced by the company on ASX that Fairfax shareholders have approved the proposal by Nine Entertainment Co. Holdings Limited to acquire 100 percent of the issued capital of Fairfax by way of a scheme of arrangement. As per the announcement on ASX, 88.60% of the votes cast by Fairfax shareholders present at the Scheme Meeting (in person or by proxy) were in favour of the resolution. Following the release of this news, the shares of the company increased by 2.439 percent as on 19 November 2018.
Fairfax will now take approval from the Court at a hearing scheduled for 27 November 2018 and if the Scheme is approved by the Court, Fairfax proposes to lodge the orders of the Court with ASX on 28 November 2018 and the Scheme will become effective on that date. Fairfax is planning to suspend its shares from trading on ASX from the close of trading on 28 November 2018.
According to the Fairfax Chairman Mr. Nick, the Fairfax shareholders have voted overwhelmingly in favour of the proposed Nine mergers as they clearly see the potential of maintaining their shareholding in Fairfaxâs growing businesses while participating in the combination benefits with Nine. He further added that the management of the company believes that the merged businesses will deliver a stronger, digitally-focused media organization with a compelling multi-platform audience reach.
In the last six months, the share price of the company increased by decreased by 19.61 percent as on 16 November 2018. FXJâs shares traded at $0.630 with a market capitalization of $1.41 billion as on 19 November 2018 (AEST 2:32 PM).
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