Sharemarket levels Nine and Fairfax as Catalano 'bid' fails

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There was last-minute fun and games for Fairfax Media shareholders as former Domain chief executive Antony Catalano expressed an interest in taking over the business, without - it was decided - formalising a bid.

The Australian Financial Review and Sydney Morning Herald (both Fairfax titles) reported that he had written to Fairfax chairman Nick Falloon last night proposing to buy 19.9 per cent at a premium on market prices and that the shareholders' meeting be postponed.

Instead what happened at the scheme meeting was that Falloon said he deemed Catalano's letter was not "a real proposal", and the absence of any other letter or proposal, shareholders voted 81.49 per cent for, 18.51 per cent against the merger into Nine Entertainment.

Australian regulator the ACCC has already said it would not object the merger.

Questioned about the future of the Fairfax brand and its mastheads, Falloon said that their survival would be dependent upon their business model, and called the merger, "its best opportunity".

Shares and market capitalisation of both companies have fallen since the merger announcement, so that they are close to level pegging: Fairfax by a third of a billion dollars to about $1.437 billion, and Nine's by almost three-quarters of a billion to approximately $1.473 billion.

The Australian quotes former Rural Press chairman John B. Fairfax - who put his business into a 2008 merger with Fairfax - as disappointed that the Fairfax brand - which has "respect and credibility" - will be retired under the merger, rather than that of Nine.

Earlier this year, Roy Morgan's Media Net Trust survey found that Fairfax was "the only" print brand to have a positive trust score.

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