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Australian broadcaster the Nine Network and publishing giant Fairfax Media have all but cleared the final hurdle in their planned $3.1 billion (AUS$4 billion) merger to proceed in December, creating the country’s largest media company.
The Federal Court of Australia on Tuesday approved the merger, despite a last-minute attempt to block it by minor Fairfax shareholder and a former executive Anthony Catalano.
Catalano had argued that the Fairfax board did not give its shareholders an opportunity to consider his competing offer at the company’s recent annual general meeting. Catalano’s counsel also told the court that because of a substantial fall in Nine share price since the deal was announced in July, Fairfax shareholders were being “short-changed” by $600 million.
Justice Jacqueline Gleeson said, however, that the merger should proceed and that “there was no good purpose in providing that [Catalano’s bid] to shareholders or delaying the shareholders meeting in order to address that.”
This was particularly the case “in circumstances where the board had identified they had no intention of appointing him to the Fairfax board,” she said.
The Nine deal had already been approved by Fairfax shareholders and Australian antitrust regulator the Australian Competition and Consumer Commission earlier in November. More than 80 percent of Fairfax shareholders approved the merger.
Despite it being sold by the two parties as a merger, it’s effectively a takeover by the Nine Network, with Nine shareholders holding a 51.1 percent stake in the new entity and Fairfax shareholders holding 48.9 percent.
The company will be known as Nine and will start combined operations on Dec. 10.
It will be led by Hugh Marks and Peter Costello, the chief executive and chairman of Nine Entertainment, respectively.
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