Fairfax family blasts Nine deal

A prominent member of the Fairfax family has attacked the Nine takeover of Fairfax.

John B. Fairfax on Nine’s takeover of Fairfax: ‘It should be the other way around.’

A prominent member of the Fairfax family has attacked the Nine takeover of Fairfax, saying the newspaper company has more credibility than the commercial network associated with media moguls Kerry Packer and Alan Bond.

“It should be the other way around, and it is not,” said John B. Fairfax, who sold his 9.7 per cent stake in Fairfax Media in 2011 for $193 million.

The comments came as former Domain chief executive Antony Catalano last night entered the fray with an eleventh-hour attempt to block Nine’s bid, saying he would buy up to 19.9 per cent of Fairfax and seek to implement a turnaround strategy for the group.

Fairfax shareholders meet this morning to vote on whether to push ahead with the $4 billion merger, effectively marking the end of the 177-year-old publisher as a stand-alone company.

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.

Mr Waislitz said he would have preferred for the Fairfax board and management to continue to “liberate cash” from some of the non-strategic assets where appropriate. He also urged a share buyback and businesses mainly based around the Domain digital real ­estate business.

Mr Fairfax, the cousin of Warwick Fairfax Jr, was chairman of Rural Press for more than 15 years before it was sold to the listed Fairfax Media. Speaking at a Media Hall of Fame dinner, Mr Fairfax also criticised Nine’s decision to lose the Fairfax name.

“It would be absolutely crazy not to retain the Fairfax name. I do say in some humility that I think it has respect and credibility and I am not sure I can apply the same criteria to Nine Network. I associate that more with Mr Packer and Mr Bond,” he said.

Nine chief executive Hugh Marks has previously told The Australian the Fairfax brand is not an audience brand, and that the audience resonates with the brand of the individual mastheads.

James Packer’s grandfather Sir Frank bought GTV-9 in Melbourne in 1960 and the family control of Nine ended in a deal with private equity firm CVC in 2009. Mr Bond took control of the Nine Network for $1.05bn in 1987, but went bankrupt in 1992, with James Packer’s father Kerry taking back control. “I just hope that merged entity puts sufficient emphasis on journalism and the quality of journalism and doesn’t sink it below various commercial interests,” Mr Fairfax 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.

It also includes a majority stake in ASX-listed online property listing group Domain and a 54.5 per cent shareholding in listed-radio network Macquarie Media, home of Sydney’s 2GB and Melbourne’s 3AW. The new entity will also jointly own subscription video-on-demand group Stan.

The merger, which was unveiled on July 26 after Nine ­approached Fairfax, is forecast to deliver annual cost savings of at least $50m.

Mr Waislitz said he would make a separate decision about whether he retained his stake in the merged company.

“We hope (Nine) can deliver on the initi­atives they have outlined, which is both synergistic revenue opportunities and cost opportunities and if they achieve that the Nine share price should perform.”

with Lilly Vitorovich