Fairfax shareholders have voted to approve the the proposed merger with Nine Entertainment, but former head of Fairfax-owned real estate site Domain Antony Catalano says he will take the matter to court.
The Fairfax board said it could not consider Mr Catalano’s 11th-hour bid to prevent the merger. In a letter late on Sunday, Mr Catalano sought to have the shareholder meeting to be adjourned for a fortnight so his late proposal could be heard.
On Monday, he told Channel Ten’s Sandra Sully that he would challenge the shareholder vote in the Supreme Court next week.
“[Fairfax chairman Nick] Falloon has denied shareholders the opportunity to consider an alternative proposal which I believe is a superior proposal to the current scheme arrangement with Nine,” he said.
“I’ve had 26 years in that business … and they don’t give me a chance to present a proposal.”
Mr Catalano also said Fairfax Media chief executive Greg Hywood was the best person to assess the sale of key assets.
“The most experienced Fairfax business person is leaving the business and we, as shareholders of Fairfax, have to rely on Nine to sell assets they don’t fully understand.”
“The person who does is Hywood and he’s leaving at Christmas.”
The Fairfax board had unanimously recommended shareholders vote in favour of the scheme. They duly followed that lead, with Fairfax Media reporting that 81.49 per cent of shareholders voted yes.
Fairfax said proxies voted 94.2 per cent for the scheme arrangement, representing 66 per cent of shareholders.
The merger is set to proceed, with final court approval on November 27.
That will leave Australia with four major media players instead of five, as Nine adds newspapers such as The Age, The Australian Financial Review and The Sydney Morning Herald to its network.
The deal would also give the new business Fairfax’s majority stake in Domain, streaming service Stan, and a 54.5 per cent stake in the Macquarie Media radio network.
The merger was initially flagged in July. Earlier in November it got the green light from the competition watchdog, which found it would not substantially diminish competition in Australian news and media.
Out of the blue, and at the last minute, ex @Domaincomau CEO Antony Catalano seeks to delay tomorrow’s @FairfaxMedia AGM to vote on merger with @Channel9. He offers to buy 19.9% of shares & wants Fairfax board seat. @9NewsAUS @MoneyNewsShow pic.twitter.com/V4EBOTa81f
— Ross Greenwood (@Ross_Greenwood) November 18, 2018
On Sunday, Mr Catalano wrote to Mr Falloon, offering to acquire up to 19.9 per cent of the media company at above-market prices.
The offer was conditional on the merger being defeated, and Mr Catalano gaining a seat on the Fairfax board.
It’s understood he has been buying blocks of shares at 65 cents in a bid to lift his stake to 19.9 per cent. This could include the possibility of private equity investment.
The Australian reported Mr Catalano had hoped to delay the Fairfax shareholder vote.
The letter to Mr Falloon outlined Mr Catalano’s desire to adopt a “multipronged strategy to generate more value for the publisher’s shareholders by selling non-core assets, building the Domain franchises and pursuing other asset sales,” The Sydney Morning Herald reported.
The news of the merger has also led to speculation that News Corp may enter a similar arrangement with the Seven Network.