Nine Entertainment (ASX:NEC) and Fairfax (ASX:FXJ) inked a deal to merge, which will make Nine one of Australia’s largest media companies.
The proposed deal is subject approvals, involves Nine buying all of Fairfax shares. If implemented, Nine shareholders will own 51.1 per cent of the new entity, and Fairfax shareholders will own the remaining 48.9 per cent, with the combined businesses to be led by Nine’s CEO Hugh Marks, while Peter Costello will be chairman.
New Nine shares will start trading in the week beginning 26 November, and Fairfax shares will stop trading on the ASX in the first week of December.
Fairfax shareholders will receive 0.3627 Nine shares for every Fairfax share (scrip consideration) and $0.025 cash (cash consideration) per Fairfax share. The total consideration is a 22 per cent premium to Fairfax’s closing price on 25 July 2018 [$0.77].
The combined business includes Nine’s free-to-air TV network, a portfolio of online businesses including Domain, Stan and 9Now, as well as Fairfax’s mastheads and radio shows through Macquarie Media.
Nine is expecting to report Group EBITDA (for the year ending June 2018), at the upper end of its guidance ($250-260 million).
Shares in Nine Entertainment (ASX:NEC) last traded at $2.52 while Fairfax (ASX:FXJ) shares last traded at $0.77.