After canvassing the market for buyers for years without success, Nine Entertainment’s next move could be to bring Domain Group back in house to diversify the business away from the volatile earnings of its television unit, sources say.
DataRoom revealed this month that New York-based private equity firm Kohlberg Kravis Roberts is understood to have explored a buyout proposal for the $2bn Domain in 2021, when the pair were also looking to partner to buy Property Exchange Australia.
While a new Nine chief executive is yet to be appointed, sources are not ruling out mergers and acquisitions being on the agenda when former boss Mike Sneesby’s replacement is eventually named.
Acting CEO Matt Stanton is now shaping up well for the role and has impressed directors.
The future of recently appointed chair Catherine West, a director since 2016 remains under the spotlight given that she was a director at Nine during its controversy.
Allegations have been raised of inappropriate conduct in the news and current affairs division of Nine by its department head Darren Wick, as outlined by an independent review into company culture. Mr Wick resigned this year.
Mr Stanton was Nine’s former chief financial and strategy officer, joining in 2022, and should he be named as the next CEO, he would have a clear idea of where he would want to take the company.
While Mr Sneesby was at the helm, it is understood that he had aspirations to venture into outdoor advertising to diversify the group away from television, which produces good cash flow from advertising but creates earnings that are volatile.
As earlier reported by DataRoom, Mr Sneesby looked at buying Quadrant’s outdoor advertising business QMS, and he was keen to buy oOh!media, but the share price was too expensive. But it is now far cheaper.
There’s questions whether oOh!media provides insight into its profit guidance amid what market experts believe are deteriorating conditions and at a time the group has been underperforming some peers.
Some market experts have a view more of its billboards need to be skewed away from static and towards digital.
oOh!media’s market value is currently $647m and its $1.22 share price – lower than what it listed at in 2014 – has never really recovered from the global pandemic, hitting highs of around $4.31 in 2018 since its time listed.
Nine also weighed an acquisition of oOh!media before its float by private equity.
Meanwhile, on Domain Group, there has been talk that Nine – a publisher, broadcaster and digital media business – is understood to be weighing a move to privatise Domain with help from private equity
Taking Domain off the listed market could boost performance behind closed doors, without scrutiny, but that’s proving to be tough to do for Nine.
Nine purchased Fairfax around 2018 in a transaction at the time worth about $2.1bn but before that, in response to Fairfax fielding private equity approaches, it demerged Domain to be a separately listed company and retained 60 per cent.
Domain is the second-largest player in the sector behind REA Group, which is 61 per cent owned by News Corp, publisher of The Australian.
Domain’s share price is at the same level it was four years ago when it was demerged after peaking in 2021 at over $5 during the pandemic.
Working as Nine’s adviser is Jefferies Australia.
New potential candidate for Fletcher Building chair emerges
Sources believe a former telco boss is one of the names being put forward by shareholders as a preferred chairman for Fletcher Building.
Adamantem to add Legend to growing IPO list
Private equity firm Adamantem Capital is understood to be preparing its Legend electrical business for an IPO.