Fairfax Media and Nine Entertainment have announced plans to merge by the end of 2018 to create Australia's largest integrated media player.
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The combined company, to be led by current Nine chief executive Hugh Marks, will include Nine's free-to-air television network, Fairfax's mastheads including The Sydney Morning Herald and The Age, a suite of digital assets including property listings portal Domain, subscription video platform Stan and 9Now, and Fairfax's radio interests through Macquarie Media.
The companies said in a joint statement on Thursday that the proposed transaction would be implemented by Nine under a scheme of arrangement, subject to approvals.
Once the deal is completed, Nine shareholders will hold 51.1 per cent of the combined company, with Fairfax shareholders owning the remaining 48.9 per cent.
Under the proposal, Fairfax shareholders will receive 0.3627 Nine shares and $0.025 cash for each Fairfax share, implying a 21 per cent premium to Fairfax's closing price on Wednesday. Fairfax directors will recommend shareholders vote in favour of the scheme in the absence of a superior proposal.
“The proposed transaction for Fairfax reflects the success of Fairfax’s transformation strategy which has created value for shareholders through targeted investment in high growth businesses, such as Domain and Stan, and prudent management of our media assets," Fairfax chief executive Greg Hywood said.
"The combination with Nine provides an exciting opportunity to continue to drive incremental value well into the future.”
Three Fairfax directors will join the board of the new company, chaired by Nine chairman Peter Costello, with another two current directors from Nine.
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