Fairfax Media has revealed plans to separate star asset Domain from its traditional media businesses, revealing it has recruited a member of the private equity bid team that stalked the 186-year-old publisher just five months ago to join the board, reports the Australian.
A 221-page ASX filing starts the clock for Domain executives to persuade investors on an international roadshow that it deserves a $1 billion valuation ahead of a partial listing on the local bourse on November 23.
In the plan, Fairfax will continue to own a 60 per cent shareholding in Domain after the separation, in what will be a turning point for the owner of The Sydney Morning Herald and The Age.
The Australian reports that REA Group executive Greg Ellis will join the Domain board as an independent non-executive director after helping American investor Hellman & Friedman mull a takeover offer.
Mr Ellis’s re-emergence has revived speculation about a potential deal between Fairfax and Hellman, centred on Domain.
The separation is being undertaken to address a perception within Fairfax that its share price did not fully reflect the full value of Domain.
In a letter to shareholders, Fairfax chairman Nick Falloon said the board had considered a range of potential options before pressing ahead with the separation, including “retaining the current operational structure, pursuing a full demerger and selling shares directly in an initial public offering of Domain”.