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Former Domain CEO Antony Catalano has confirmed he will mount a court challenge to the merger between Fairfax Media (ASX: FXJ) and Nine Entertainment (ASX: NEC), saying he has the financial backing to acquire a 20 percent stake in his former employer.
Catalano says he has a superior proposal to the Fairfax-Nine merger, which was given shareholder approval last week, and will ask the Federal Court to reject or defer the deal as he has support from shareholders.
"I have heard from a number of shareholders that would like to consider an alternative proposal," Catalano says.
Last week historic Australian media company Fairfax Media appeared as though it was consigned to history after 82 percent of its shareholders approved a $4 billion "merger" with Nine Entertainment. The Fairfax brand is one of the oldest in Australia, founded by John Fairfax in 1841 when he acquired the Sydney Morning Herald.
Catalano says his proposal is superior to the merger deal and that his court submission would outline a "range of concerns" with the Fairfax-Nine merger.
On the day before the shareholder vote last week, Catalano launched a dramatic bid to stall the merger by revealing he had individual backers who were prepared to buy a 20 percent stake in Fairfax, worth around $300 million, with a plan to implement a range of asset sales to deliver value to shareholders.
The Fairfax board rejected the approach.
It's been reported the asset sales included Fairfax's stakes in radio broadcaster Macquarie Media, streaming service Stan and regional and New Zealand mastheads to raise about $800 million. The plan would leave Fairfax with its metropolitan media assets such as The Age and The Sydney Morning Herald and 60 per cent of the now separately listed Domain.
Fairfax shares were steady at $0.62 at midday (AEST) and Nine Entertainment shares were also steady at $1.68.
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