Fairfax and Nine have announced a $4 billion merger, creating an integrated goliath across television, online streaming, print, digital, and real estate advertising. The catch? All at the cost of Fairfax's name.
Fairfax will contribute three directors to a board of six.
Nine's offer to Fairfax shareholders includes 0.3627 Nine shares for each Fairfax share they currently own and 2.5 cents cash per share.
The deal is around a 22 percent premium to Fairfax's closing price of 77 cents yesterday.
Fairfax's directors have unanimously recommended the deal unless another company comes in with a better offer.
"The structure of the proposed transaction provides an exciting opportunity for our shareholders to maintain their exposure to Fairfax's growing businesses whilst also participating in the combination benefits with Nine," Fairfax's chairman Nick Falloon said in a statement.
The proposed merged media giant will include Nine's free-to-air television network, digital advertising businesses (such as Domain), streaming services Stan and 9Now, Fairfax's newspapers and online publications, as well as Fairfax's Macquarie Media radio interests.
Fairfax's investors reacted enthusiastically to the tie-up, sending the company's shares 12 percent higher to 86 cents shortly after 11:00 am (AEST).
However, Nine investors were not keen, pushing the company's share price 7.5 percent lower to $2.33.
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