Fairfax

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Legal proceedings aimed at preventing a merger between Fairfax Media and Nine Entertainment have fallen short in the Federal Court.
Former Domain chief executive Antony Catalano had <a href="https://www.urban.com.au/news/92467-antony-catalano-eyes-domain-return" target="_blank">launched the challenge</a> after Fairfax shareholders voted for the merger last week. 
Catalano argued Fairfax shareholders had not been given the opportunity to consider his proposal which included acquiring 20 per cent of the company’s shares.
Justice Jacqueline Gleeson approved the Nine-Fairfax scheme of arrangement after the ACCC gave it the green light earlier in the month. 
“I believed and continue to believe that at current share prices Fairfax shareholders were entitled to a better deal,” Catalano told The Australian.
“I have put my arguments to the court but I have not been successful. I respect the court’s decision and am unlikely to appeal, but I will reserve my rights until my legal team has had a chance to review Her Honour’s written decision.”
In his 11-page affidavit to the court yesterday, Catalano further outlined his alternative proposal to "deliver better value for Fairfax shareholders”.
Mr Catalano had voiced his opposition to the Nine merger by sending a letter to Fairfax chairman Nick Falloon on the eve of the Fairfax shareholder merger vote.
In the vote, 81.49 per cent of Fairfax shareholders backed the deal.
Catalano’s lawyer sought an adjournment to get a second independent report prepared, which was <a href="https://www.urban.com.au/news/92474-antony-catalano-fails-in-his-air-headed-domain-return" target="_blank">rejected by Justice Gleeson</a>.
The group will own nearly 60 per cent stake in online property listing group Domain.
Fairfax shares will cease trading on the ASX at the close of trade tomorrow.
 
 
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Catalano's Federal Court foray fails to stop Fairfax-Nine merger

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The now not so hip activist investor Nick Bolton has emerged as a backer of Antony Catalano’s 11th-hour plan to derail the Fairfax-Nine merger.
The former Domain CEO has confirmed he will mount a court challenge to the merger between Fairfax Media and Nine Entertainment.
Catalano says he has a superior proposal to the Fairfax-Nine merger, which was given shareholder approval last week.
He will ask the Federal Court to reject or defer the deal as he has support from shareholders.
"I have heard from a number of shareholders that would like to consider an alternative proposal," Catalano says.
Catalano says his court submission would outline a "range of concerns" with the Fairfax-Nine merger.
Controversial greenmailer Nick Bolton's investment vehicle Aurora Funds Management was set to appear before Judge Jacqueline Gleeson.
On the evening before the shareholder vote last Monday week, Catalano launched a dramatic eleventh hour bid to stall the merger by revealing he had a plan to implement a range of asset sales to deliver value to shareholders.
Catalano sent a letter to the Fairfax board at 8pm Sunday, with the board meeting to reject the proposal ahead of the 10am Monday shareholders' meeting.
The Fairfax board rejected the approach and proceeded with the long-scheduled vote of the merger.
Nine and Fairfax sources expect Catalano's court action to be unsuccessful.
And Herald Sun columnist Terry McCrann wrote Catalano was "not the 2018 version of the 1980s corporate raider and master manipulator Robert Holmes a Court. Not even close.'
"If Holmes a Court had pulled a stunt like the one you tried on Fairfax Media on Sunday night, it would have been an elegant combination of real financial substance, loaded with menace, and actually committing him to nothing."
"To call it an inept and rather embarrassing joke would be to give it more credibility than it deserved," McCrann wrote.
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Antony Catalano’s 11th-hour plan to derail the Fairfax-Nine merger hits Federal Court

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The former Domain chief executive Antony Catalano failed in his eleventh-hour, air headed attempt to block Nine’s bid for Fairfax Media.
Some 81 percent of the Fairfax shareholders voted for the merger.
There was no appearance by the Melbourne-based former chief executive at the Sydney meeting Monday morning.
There was just one question from the floor as to whether the chairman Nick Falloon had given consideration to the request to postpone the vote to give greater consideration to Catalano's Sunday night missive.
The 81 percent vote included the use of some 16 percent open proxy votes which were voted in favour of the merger by the chairman.
Catalano had <a href="https://www.urban.com.au/news/92467-antony-catalano-eyes-domain-return" target="_blank">indicated he would buy up to 19.9 per cent of Fairfax</a> to then implement a Domain-led turnaround strategy for the ailing media group from a board seat.
Fairfax shareholders voted to push ahead with the $4 billion merger, which would mark the end of the 177-year-old publisher as a stand-alone company. 
The Fairfax board met early Monday and unanimously urged a vote for the merger.
The merger needed 75 percent of total votes cast, so Catalano may have succeeded with more time.
Overnight Catalano hit out at the Fairfax Nine merge plan, saying the current proposal did not apply a sufficient premium for control of Fairfax’s majority-owned digital real estate arm, Domain.
He said $740 million in value in the share takeover had been lost since the planned merger was announced in July.
Catalano's friend, the billionaire investor Alex Waislitz said he planned to vote his Fairfax shares against the merger. 
Share market activist Stephen Mayne tweeted the 11.4 percent of voted shares and 18.51 percent of voting shareholders was "more resistance than usual" in these scheme merger deals.
The combination of Nine and Fairfax's publishing assets will create a business with around $500 million in revenue.
Over the weekend a prominent member of the Fairfax family, John B Fairfax attacked the Nine takeover of Fairfax, saying the Fairfax newspaper company and name has more credibility than the commercial network associated with media moguls Kerry Packer and Alan Bond.
Last week the former prime minister Paul Keating said the ACCC’s approval of the Nine-Fairfax merger was a "truly appalling decision."
Catalano has flagged he could challenge the merger deal in court next week, Fairfax Media has reported.
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Antony Catalano fails in his air headed Domain return

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The former Domain chief executive Antony Catalano has launched an eleventh-hour attempt to block Nine’s bid for Fairfax Media, indicating he would buy up to 19.9 per cent of Fairfax to then implement a Domain-led turnaround strategy for the ailing media group from a board seat.
Fairfax shareholders meet today to vote on whether to push ahead with the $4 billion merger, which would mark the end of the 177-year-old publisher as a stand-alone company. 
The Fairfax board met early Monday and unanimously urged a vote for the merger.
The merger needs 75 percent of total votes cast.
Catalano hit out at the Fairfax plan, saying the current proposal did not apply a sufficient premium for control of Fairfax’s majority-owned digital real estate arm, Domain.
He said $740 million in value in the share takeover had been lost since the planned merger was announced in July.
Catalano's friend, the billionaire investor Alex Waislitz has said he planned to vote his Fairfax shares against the merger. 
“I’m not going to back the merger ... even though I can see there is some structural and ­strategic benefits to having the wider platform for products to be sold across, and also there are a lot of synergy benefits to it,” he told The Australian.
Mr Waislitz’s listed fund Thorney Opportunities and private fund Thorney Investment Group combined own more than 50 million Fairfax shares., about two per cent of the company.
“(Nine’s) Hugh Marks and the team there have done a good a job at Nine. However, I do think they have been clever at buying Fairfax at a very good price and with the recent fall in the share price Fairfax shareholders are missing out on a lot of value with the scheme going ahead,” he said.
The merged Fairfax will consist of Nine’s free-to-air television network, home to reality shows such as Married At First Sight and The Block, and digital business 9Now, plus Fairfax’s Australian and New Zealand mastheads, including the The Sydney Morning Herald, The Age and The Australian Financial Review. 
In a letter sent to Fairfax Media chairman Nick Falloon last night, and obtained by The Australian, Catalano proposed acquiring an interest of up to 19.9 per cent in Fairfax Media “at a price superior to the intrinsic market-to-market value of (Nine’s proposal) of up to 65c per share”.
Shares in Fairfax closed on Friday at 61.6c.
“As the former CEO of ­Domain, I have a unique knowledge of that business, and accordingly believe that I could provide significant assistance in optimising its value for Fairfax shareholders, along with providing a strategy for the balance of Fairfax’s valuable assets,” Mr Catalano said.
He asked Mr Falloon to ­adjourn the shareholder meeting for at least two weeks to allow shareholders and the Fairfax board to properly consider his ­alternative proposal. 
“Through my inquiries, I understand that the general sentiment of Fairfax major shareholders is that the merger scheme (at current prices) is a disappointing outcome and that an alternative outcome is an option that could find considerable support that could see Fairfax shareholders achieve full value for their holding,” he said.
“I intend to then have Fairfax pursue a multi-pronged strategy to build and realise value for Fairfax shareholders. This strategy ­includes the divestiture of non-core assets, building the Domain franchises and pursuing asset sales with a suitable control premium not presently factored into the (Nine) scheme, with all proceeds to be returned to Fairfax shareholders as cash distributions or by way of share buybacks.’’ 
The former property reporter Catalano spent more than four years at the helm of Domain, but just two months fronting the publicly listed Domain company, quitting the digital real estate group in January.
Nine Entertainment has left the door open to sweeping up minority stakes in Domain after any merger with Fairfax Media.
 
 
 
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Antony Catalano eyes Domain return

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The tech billionaire Mike Cannon-Brookes and his wife Annie Todd have bought Australia’s most expensive house, the harbourfront jewel, Fairwater at Double Bay.
The sale, possibly for close to $100 million, and likely to be in cash, ends more than a century of Fairfax family ownership on Seven Shillings Beach.
Despite the end of the boom, their purchase highlights the enduring popularity of premium harbourfront property, as old money passes the baton to new money.
It took just three weeks for the 1.12 hectare estate to sell, although there had been expectations of its listings since the death of Lady (Mary) Fairfax last September.
The current Sydney time on market has edged up this year to be taking 37 days to find buyers, among the 28,000 current offerings available for sale, according to CoreLogic.
Property developer Richard Sheinberg had been among those who'd been through.
“We are delighted with the purchase of Fairwater for our young family and look forward to continuing the legacy of this beautiful Sydney home,” Cannon-Brookes said. 
“We love the idea of raising our four young children in this historic property, filling the house and gardens with love and laughter through the years," the Cannon-Brookes said.
The price has not been revealed since its sale on Wednesday night, but it had been expected to fetch somewhere between the $71 million paid right next door and close to $100 million.
The sale coincided with a visit to Sydney from the United States by Cannon-Brookes who spends much of his time in San Francisco near Atlassian's US HQ.
The billionaire was always tipped to be its likely buyer, and not just because estate agents pinpointed his Kalamazoo, American-born wife as keen to secure an Australian trophy home.
His Atlassian business partner Scott Farquhar paid $71 million without any mortgage next-door for another Fairfax family home, Elaine which took three years to sell.
There was no formal website marketing for the home that dates back to 1881, but interested parties were being taken through the landmark home by Christie's International agent Ken Jacobs.
“Elaine and Fairwater are the golden girls of Sydney Harbour,” selling agent Ken Jacobs said earlier this month.
"To get over 11,000 square metre of land on Sydney Harbour is just unheard of, and it will be impossible to repreat that," Jacobs said.
"You'd have top buy 11 standard Point Piper sites to get to this size, so it's really just a one off.
"Internationally, to get a property as revered as this within five kilometers from the CBD and this landsize, and on a harbour, is just unheard of.
"It's very extraordinary for a property like this to still exist."
Almost like Cannon-Brookes and Farquhar's business exploits, Jacobs suggested Fairwater and Elaine complement each other.
"They add value to each other because you've basically got Australia's two best properties together. And they're both about to be revived to their former glory."
"They're both legacy properties," Jacobs said, adding that they're not on the radar of properties that continually turn over.
"They're ones that have just been there and maintain quite an amount of mystique.
"It was wonderful when Elaine came to the market, but with Fairwater, it takes it to another level because of the land size.
"It's an acre larger than Elaine and the grounds are just extraordinary.
"It may not come for another hundred years or more."
The Atlassian co-founders' wealth is pegged at a combined $6 billion after Atlassian was founded in 2002 using $10,000 in credit card debt.
The Atlassian co-founder Mike Cannon-Brookes was always on Jacob's radar as a prospective buyer.
He recently sold his Braelin, his Centennial Park trophy, for $16.5 million, and has looked at several trophy homes to purchase.
Last year the family even stayed at Barford in Bellevue Hill to test whether they liked it there on the hillside location.
The Cannon-Brookes had already spent a combined $16 million on two non-waterfront Double Bay houses. The acquisitive couple have spent more than $45 million worth of homes in the past six years including a second Southern Highlands weekender.
The Double Bay offering by the executors of the late LadyFairfax had been in the Fairfax media dynasty family since 1901 when Sir James Oswald Fairfax paid £5,350.
The two-storey, late Victorian mansion - which was designed by architect J. Horbury Hunt for stockbroker, Francis Joseph in 1881, is set on five sub-dividable blocks on exclusive Seven Shillings Beach. 
Elaine is a 6,900 square metre land holding, with Fairwater ranked as the largest privately-owned harbour side landholding, spanning 11,210 square metres.
"It is remarkable that an estate offering such rare and unrepeatable features still exists in Australia today; this opportunity will not come again," Jacobs said.
"It's not what you expect to find in Sydney.
"It's what you expect to find in Newport, Rhode Island for example, because of the grandness of the estate."
Coming without Opera House views, and just the top of the Bridge, the property was always likely to sell to locals rather than Chinese buyers who seek the postcard aspect. 
The top 10 sales across Australia include four sales in Point Piper, three in Vaucluse, one in Melbourne's Malvern and a Mosman Park compound in Perth, which when sold for $57.5 million in 2009, held the national price record.
There had only been one prior listing through to had the potential of securing $100 million, just around the corner.
It was in 2016 when Aussie John Symond listed his Point Piper trophy home with unconfirmed $100 million plus expectations.
His modern four level harbourfront home, set on 2685 square metres, was so vast, and then without vegetation, that it was nicknamed 'Aussie Stadium'.
The state government will secure $6.94 million stamp duty on the touted $100 million sale, and $14.9 million if the Cannon-Brookes are considered based overseas and subject to foreign buyer duty.
Lady Fairfax briefly contemplated gifting her mansion to the people of NSW. 
In 1996 Lady Fairfax announced a trust of seven was being established to oversee the estate. 
Lady Fairfax, who later declined to comment on her intended gift, moved into Fairwater with her husband, Sir Warwick in 1969.
During her decades the Fairwater grounds had been regularly opened for charitable fundraising occasions, including the East West Foundation, the Australia Ireland Fund, the Opera Foundation Australia (founded by Lady Fairfax) and the Cochlear Implant Centre, Sydney. 
At one dark stage in the Fairfax annuls, the mother of fallen media boss Warwick Fairfax, suggested after he lost the newspaper empire, that she might have had to sell part of the grounds to pay the land tax and its upkeep.
"Fairwater is safe but what is Fairwater without the garden, it's just another big old house," she said amid the 1990 company stockmarket turmoil.
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Fairfax's Fairwater sale reflects baton change from old media to new tech

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The billionaire Melbourne investor Alex Waislitz says many shareholders in real estate website company Domain want the recently departed Antony Catalano back as its chief executive.
He said he was disappointed Catalano, who resigned unexpectedly last month, was not still its boss, adding his confidence in the overall leadership of Fairfax and Domain has been "dented".
He also suggested Nick Falloon should not be chairman of both Fairfax and Domain.
Waislitz offered himself to mediate some sort of rapprochement between Catalano and Fairfax management.
<div class="cq-article-content-media section">"Many of the investors I have spoken to, in light of the limited amount of information that has been made available publicly about [Mr Catalano's] behaviour, would say they would be happy to have him back," Mr Waislitz told The Australian Financial Review.
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"I think Catalano has proven himself to be the best person to run the business at this point in time. I don't know who the candidates are that they are interviewing. Could he come back? I'm not sure. 
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"Would he come back? I'm not sure."
<div id="article-inline-ad" class="adWrapper">The activist investor via his private investment group Thorney had been a close friend to Catalano.</div>
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<div class="adWrapper">Waislitz said he had sold some Domain stock since Catalano's resignation on January 22. </div>
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"We have reduced our position over the last few months, and including since he left. We will be driven by the information that comes out. We may sell more, we may buy more. We are keeping our options open.
"I'm very disappointed [Mr Catalano] is not there because he was [the] driver. On the other hand, he built a great team and the company will go on regardless. Obviously there are details that are still to come out.
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"I think wiser heads should be involved; other directors of the boards of Fairfax and Domain should get involved in the discussion, take the emotion out of it, take some of the egos out of it and come up with sensible way to end this that allows the company to go on and grow."
Domain reported a half-year operating profit of $56.8 million earlier this week.
Its shares are down about 10 per cent since the beginning of January.  
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Push for Antony Catalano to return to lead Domain

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Fairfax Media is looking for new Sydney headquarters after agreeing to Google to take its remaining space at Pyrmont.
After almost a decade in the Mirvac-owned building at 1 Darling Island Road, Fairfax has assigned over its remaining 9000 square metre lease over three floors to Google, who had been subletting since 2013, a demoralising physical sign of the massive shift amid the digital age. 
Fairfax's lease was to run until 2027.
Google has already taken several floors in the 22,000 square metre building from Fairfax which signed up to the deal under its late chairman Sir Ron Walker.
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Fairfax has about 950 staff at Darling Island.
It is seeking between 8000 square metres and 10,000 square metres.
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Google is still looking for new long term headquarters as well.
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Fairfax cedes Darling Island to Google

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Domain is expected to be spun out of Fairfax in November, pending a shareholder vote at an extraordinary general meeting.
Fairfax updated the stock market on progress of its plans for the Domain group today.
Fairfax plans to retain a 60 percent stake in Domain, with the remaining 40 percent distributed to Fairfax shareholders.
Nick Falloon will be chairman of Domain. 
<a href="https://www.propertyobserver.com.au/images/2017/08/16/Screen%20Shot%202017-08-16%20at%201.38.37%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/08/16/Screen%20Shot%202017-08-16%20at%201.38.37%20pm.jpg" alt="">
Domain delivered 19% growth in digital revenue but a 12% fall in print ad revenue over the past financial year.
Domain’s operating expenses increased 17%, but its print costs fell 6%, largely as a result of a new magazine format.
EBITDA also fell 6% in the first half as a result of investment, but improved in the second half.
The publishing giant’s biggest area of growth was Domain Group, which climbed 8.1% to $320.3 million revenue from $296.3 million for FY16.
Fairfax expects a scheme booklet to be available in late September, then a roadshow in November along with a shareholder vote to approve the listing in early November.
Last week the REA Group announced a 19 percent fall in full year profit to $206 million, mainly due to a write-down in the value of the company’s Asia business.
<a href="https://www.propertyobserver.com.au/images/2017/08/16/Screen%20Shot%202017-08-16%20at%201.38.51%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/08/16/Screen%20Shot%202017-08-16%20at%201.38.51%20pm.jpg" alt="">
Revenue was up 16% to $671.2 million.
Net ­profit amounted to $206.3 million in the year ended June 30, down from $253 million in the prior year.
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Domain set to be floated in November by Fairfax

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Fairfax shares were placed in a trading halt on Tuesday morning after The Australian Financial Review's Street Talk column revealed spin off plans on Monday. 
The media group seems set to retain between 60 per cent and 70 per cent of Domain under the separation plan.
Fairfax Media is considering a proposal to "spin off" its real estate business Domain. Analysts expect Domain to be worth about $2 billion as a separately listed entity.
The Australian Financial Review's Street Talk advised no formal decision has yet been made.
It wrote Fairfax is "seriously considering spinning off Domain into a separately listed vehicle to be run by current Domain boss Antony Catalano."
Macquarie Capital is advising Fairfax, it revealed.
The article comes as Fairfax prepares to hand down its financial results for the six months to December 31 on Wednesday.
Domain is expected to be a key feature at the results announcement despite recent reports of a constipated listings market.
A Fairfax spokesperson declined to comment to the AFR columnists.
Sources told Street Talk key Fairfax decision makers thought that "the time was right" to enact the long-speculated spin off plans before the end of the year.
The business column described Domain as the shining light within Fairfax earning about $130 million a year for the publishing company.
Goldman Sachs analysts expect Fairfax to report $139 million in earnings before interest, tax, depreciation and amortisation for the six-months to December 31, with Domain accounting for $65 million.
Goldman Sachs told its clients on Monday that it was "all eyes on Domain" with particular focus on any pushback from agents on January price rises.
Last November the billionaire small cap investor Alex Waislitz urged Fairfax Media to consider changing its name to Domain to reflect its growing real estate listings business is now worth more than the entire company’s market value.
Waislitz, whose listed fund Thorney Opportunities (TOP) and private fund Thorney Investment Group own more than 50 million Fairfax shares, suggested the Fairfax name was “anachronistic” and urged the media company to consider rebranding itself.
“We think Domain alone is worth in excess of the entire market capitalisation of Fairfax," The Australian reported.
Last December when speaking to Mumbrella, Antony Catalano said there was “no need” for the real estate business to float separately.
“When you have a business that is growing as quickly as Domain is growing then we have an obligation to our shareholders to realise the value of this business,” he said.
“Fairfax is never going to float this business when so much of the value still hasn’t been realised.
"We’ve said publicly this is a business we expect to grow from $120m EBITDA to somewhere in excess of $200m EBITDA over the next two to three years."
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