Nine’s future after Domain sale: regional media magnate plotting takeover bid

Nine Entertainment’s largest shareholder, billionaire media and property magnate Bruce Gordon is considering ways to take control of the company after its sale of its Domain stake is completed.

Bruce Gordon at home. Picture: Sylvia Liber

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Nine Entertainment’s largest shareholder, billionaire media and property magnate Bruce Gordon, is quietly eyeing off ways to seize control of the company after it finalises the sale of its stake in real estate business Domain.

Mr Gordon owns 19.98 per cent of Nine through its private investment firm, Birketu, and swaps that he intends to convert to equity by November that will take his shareholding to 25.22 per cent.

Multiple sources close to Mr Gordon told The Australian he was mulling whether to then make a full takeover bid for Nine or, more likely, use the creep provisions to increase his stake by 3 per cent every six months, once the Domain sale has been completed and Nine’s valuation drops.

Mr Gordon is a titan in a shrinking field of billionaires who still like free-to-air TV. He already owns WIN, the world’s largest privately owned regional television network and infrastructure-style property company, but has long harboured ambitions to own Nine.

Various sources close to the 96-year-old businessman insisted age had not wearied his desire to control Nine and put himself in the same sphere – on the domestic media front at least – as rival media owners Kerry Stokes and Nine’s former owner, the late Kerry Packer.

“The Gordons love media,” one insider simply replied when asked about whether the billionaire’s plans to take over Nine but would not be named for fear of falling out with the media powerbroker or his daughter, Genevieve Gordon, who runs WIN’s media assets.

Mr Gordon first launched a raid on the Nine a decade ago, paying $200m for 13 per cent, which expanded his stake to 14.95 per cent, before further increasing his effective holding via a swap deal just six months later.

Bruce Gordon and daughter Genevieve.

Nine’s merger with Fairfax Media in 2018 diluted his stake but he has used creep provisions to increase his shareholding since then, and in February he sold off several regional TV licences that would have prevented him making a full tilt at the company under Australia’s media ownership laws.

It is understood Mr Gordon intends to not only increase his shareholding but also seek greater representation on the Nine board, with him currently having only one director, Andrew Lancaster, who is also the chief executive of both Birketu and WIN.

If successful in taking a controlling stake in Nine, Mr Gordon is expected to investigate weaving WIN into the larger Nine, though given the two companies already share sales functions and WIN is already largely co-branded with Nine, such a move would not result in major job losses.

Nine Entertainment chief executive Matt Stanton.

The exception might be the MediaHub division, given Nine is already a co-owner in the larger TXA, which it owns with Seven.

Revelations about Mr Gordon’s intentions come as Nine chief executive Matt Stanton formulates his own plans for the media giant following the sale of Domain when the company no longer has the higher-growth real estate business to rely on.

Although Nine will receive $1.4bn for its 60.1 per cent stake in Domain, it has indicated it will give about half of that back to shareholders through a fully franked special dividend.

While Mr Stanton could opt to simply pare down debt, shareholder Investors Mutual small caps portfolio manager Lucas Goode said that would leave Nine with low growth assets. Instead, he believes they are likely to be on the hunt for “growth assets that are a better strategic fit than Domain”.

“Outdoor is the most obvious fit,” Mr Goode said. “Brand advertising fits really well with TV. There are a lot of revenue and cost synergies.”

The top pick would be oOh!media but Mr Goode – a shareholder in both companies – said a takeover premium was baked into its share price and predicted it could cost $1bn to buy.

Other potential targets could include Anthony Catalano’s digital property business, View Media Group. Seven is already a 20 per cent shareholder in that business, as is ANZ. WIN’s profits halved last year to $4.7m even though revenue dropped only 3 per cent to $195m as costs rose.