Catalano’s real estate listing plan to exclude publishing

Real estate entrepreneur Antony Catalano and backer Alex Waislitz will exclude their publishing business from an ASX listing as part of a lengthy proposal that involves a takeover of multiple assets and a shell company that once held regional broadcaster Prime Media Group.

Mr Catalano is expected to increase his stake in classifieds business Real Estate View to 72 per cent by the end of the week as he prepares to bring together a range of companies controlled by investment vehicle, IMP, and list them on the ASX by the end of this financial year. Mr Catalano said he can offer investors a competitive alternative to real-estate giants News Corp’s REA Group and Nine Entertainment Co’s Domain.

Former Domain boss Antony Catalano is preparing to bring together his real-estate assets and list publicly.Credit: Peter Braig

But the pair’s regional publishing business Australian Community Media, which houses The Canberra Times and The Newcastle Herald, will not be listed, according to a proposal which is expected to be discussed with the board of PRT Company Ltd (formerly Prime) in the next few weeks.

The details of his plan have come to light after The Australian Financial Review reported earlier this month that Mr Catalano, former CEO of real-estate listings portal Domain, was pursuing a listing on the ASX for the second time. Mr Catalano was CEO of Domain when it publicly listed in 2017. He abruptly left the business two months later.

“The plan has always been to build a diverse multi-media real estate, digital and agent services business,” Mr Catalano told this masthead. “The way I see it the total transactional value of real estate in Australia is in excess of $250 billion annually.”

Mr Catalano and Mr Waislitz run investment vehicle IMP, which owns 32 per cent of 21-year-old listings portal Real Estate View, 30 per cent of advertising group Tomorrow Agency/Media Plus and 25 per cent of The Today Business, which specialises in advertising services for developer and residential businesses. The board of Real Estate View is expected to vote on February 3 on whether Mr Catalano and Mr Waislitz’s stake will increase to 72 per cent in exchange for $75 million worth of marketing sales and promotional teams.

Mr Catalano is also involved with Apartment Developments, a website run by his son, Jordan Catalano, and Tom Hywood, the son of former Fairfax Media boss Greg Hywood. These companies, run from the same office in Cremorne, Melbourne, are expected to be rolled up into one entity and listed under the plans to be discussed with the board of what was once Prime Media Group. Mr Catalano also holds a 30 per cent stake in real-estate tech start up Propic.

Publicly listing the newspaper assets alongside real estate businesses was considered when Mr Catalano and Mr Waislitz were hoping to take over Prime in 2019, but there are currently no plans to do so. Seven acquired the regional broadcaster, and its name, for $131.9 million at the end of last year. Mr Catalano has held talks with Southern Cross Media Group about the acquisition of its regional television assets, which ended over a disagreement on price. The publishing business will remain a privately owned subscription-led entity.

The acquisition of Prime Media Group by Seven left a shell company called PRT Company Ltd, which was expected to wind up after the cash from the acquisition was given to investors including Mr Catalano and Mr Waislitz. Prime had $91.5 million in carried forward capital tax losses last financial year, which were going to be scrapped as part of the wind-up.

Mr Catalano and Mr Waislitz (who hold 23 per cent of PRT and are the largest shareholders), wrote to the board requesting the wind-up be stalled because of the value left in the shell company. Sources familiar with the plans said that Prime chairman Cass O’Connor has already been briefed on the detail of his plans, even though they have not been formally presented.

A traditional IPO is on the cards if talks with the PRT board fall through.

“We believe that regardless of which direction we take, the existence of franking credits and losses make the Prime shell valuable, and we will provide a more detailed explanation to the Prime board of the options,” Mr Catalano said. “But if that doesn’t work, we can take a more traditional approach of a fresh IPO. That process would only add a couple of months.”

“We’ve got a strong shot at drawing new audiences and bringing a more competitive offering for consumers and a bigger and better full life cycle offering for buyers, sellers and renters,” Mr Catalano said. “Domain is a more vulnerable business than REA, primarily because its earnings haven’t grown over five years, and it has a lack of diversity in its operations, whereas REA has strong earnings, more significant inroads in the mortgage market and valuable international assets.”

Domain is majority owned by Nine Entertainment Co, owner of this masthead.

The formation of a standalone real estate business made up of Real Estate View, Apartment Developments, Tomorrow Agency/Media Plus and The Today Business appeared in documents obtained by the Australian Financial Review in 2020.

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.